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Respondent determined deficiencies of $3,818 and $4,275 in
petitioners’ Federal income taxes for 1999 and 2000,
respectively.
The sole issue for decision is whether payments to John F.
Hajek (petitioner) from his employer, in addition to his regular
salary as an employee, constituted compensation for services
rendered under section 61(a)(1), or whether such payments
constituted a gift under section 102(a).
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. Petitioners’ legal residence at the time the petition
was filed was Sandy, Oregon.
Since 1993, petitioner was the general manager of a
corporation, Starwheel, Inc., which later changed its name to
Star Stamping and Manufacturing (the corporation). The
corporation’s principal activity was a wheel tool and die
business that made spoke wheels for cars and dies. The latter
activity was described as “tooling to make all * * * different
kinds of parts”. The corporation was owned solely by
petitioner’s father-in-law, Roger Marchisset. Petitioner Michele
L. Hajek, the daughter of Mr. Marchisset, had also worked for the
corporation from 1995 to 1998. She was not an employee of the
corporation during the years at issue.
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