- 3 -
For the years at issue, 1999 and 2000, petitioner’s wages
from the corporation were $20,200 and $15,600, respectively. On
their joint Federal income tax returns for 1999 and 2000, these
amounts were reported as income. However, in addition to his
wages, petitioner also received from the corporation, generally
on a weekly basis, payments that totaled $25,441 and $27,025,
respectively, during 1999 and 2000. Over the years, petitioner
received more than $150,000 in such payments beginning in 1995.
The payments received in 1999 and 2000 were not included as
income on petitioners’ income tax returns for these years. It is
these payments that are at issue in this case. Petitioners
contend these payments were gifts and, therefore, do not
constitute gross income. Respondent determined otherwise in the
notice of deficiency.
For several years prior to 1999, the corporation experienced
financial problems due largely to foreign competition. Mr.
Marchisset had, from time to time, contributed additional moneys
to keep the corporation afloat; however, over time, the
corporation was unable to survive and ceased doing business in
2001. Before arriving at that point, however, in 1995, in an
attempt to bolster the corporation’s finances and in order to pay
petitioner a salary commensurate for his services, Mr. Marchisset
made an additional infusion of capital to the corporation that
was identified or maintained as a separate account on the
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011