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A corporation is treated as a separate entity from its
shareholders for tax purposes. Moline Props. Inc. v.
Commissioner, 319 U.S. 436, 438-439 (1943). The voluntary
payment of corporate expenses by officers, employees, or
shareholders may not be deducted on the taxpayer’s individual
return. Deputy v. Du Pont, 308 U.S. 488, 494 (1940); Noland v.
Commissioner, 269 F.2d 108 (4th Cir. 1959), affg. T.C. Memo.
1958-60; Rink v. Commissioner, 51 T.C. 746, 751 (1969). Such
payments constitute either capital contributions or loans to the
corporation and are deductible, if at all, only by the
corporation. Deputy v. Du Pont, supra; Rink v. Commissioner,
supra.
A corporate resolution or policy, however, requiring a
corporate officer to assume certain expenses indicates that those
expenses are his expenses as opposed to those of the corporation.
Noyce v. Commissioner, 97 T.C. 670, 683-684 (1991); see also
Johnson v. Commissioner, T.C. Memo. 1984-598. The corporate
resolution enacted by Craft-Barnett requires petitioner to assume
certain expenses including providing office space and a vehicle,
and therefore the expenses covered by the corporate resolution
are petitioner’s expenses.
B. Individual Expenses: Shareholder v. Employee
After determining that the expenses listed in the corporate
resolution are petitioner’s expenses, we next have to decide
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