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respondent has determined against petitioners for the taxable
years 1994 and 1995.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the supplemental stipulation of
facts are incorporated herein by this reference.
At the time the petition was filed, Sam Kong Fashions
maintained its principal place of business in Philadelphia,
Pennsylvania, and Mr. Kong (a.k.a Sam Yee Kong or Siu Yee Kong)
resided in Philadelphia, Pennsylvania.
From the time that Sam Kong Fashions was formed on October
1, 1993, until sometime in March or April 1994, Mr. Kong and Kwok
Wen, Mr. Kong’s brother-in-law, each held 50 shares of 100 total
shares of Sam Kong Fashions’s stock. In 1994 and 1995, Mr. Kong
served as president of Sam Kong Fashions. During the taxable
years in issue, Sam Kong Fashions held a business checking
account at the First Fidelity Bank (First Fidelity).
Mr. Wen never served as an officer of Sam Kong Fashions, and
he never participated in the management of the business. While
he worked at Sam Kong Fashions,3 Mr. Wen performed various
duties, including ironing, handiwork, and delivery services.
Sometime in March or April of 1994, Sam Kong Fashions redeemed
3 Sam Kong Fashions employed Mr. Wen until it redeemed his
50 shares of stock.
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