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corporation failed to deposit numerous checks into its business
checking account and failed to report these amounts on its
returns. We disagree with petitioners’ contention that
respondent inappropriately attributed receipts received by Mr.
Kong to Sam Kong Fashions. Indeed, if Mr. Kong received the
checks that were not deposited in the corporate bank account in
his individual capacity, he clearly failed to report any of those
amounts on his individual income tax returns. The only income
reported by Mr. Kong and Run Yuan Chen for 1994 and 1995 was
wages received from Sam Kong Fashions in the respective amounts
of $14,520 and $23,650.
Petitioners’ conduct also indicates that these checks
constitute unreported gross receipts to Sam Kong Fashions for
sewing services rendered. The corporation deposited numerous
checks issued to “Sam Kong” into its First Fidelity account.
This shows that Sam Kong Fashions treated some of the checks
issued by the contractors to “Sam Kong” as corporate gross
receipts. Furthermore, Sam Kong Fashions failed to deposit into
its First Fidelity account at least five checks issued by
contractors and payable to either “Sam Kong Inc.” or “Sam Kong
Fashions, Inc.”
Also, petitioners’ contention that these checks represent
income to Mr. Kong for the hangers and bags supplied to the
contractors is undermined by the fact that this income was
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