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had gross receipts of $922,843 in 2001. Respondent argues that
to the extent expenses were paid or incurred, they were either
petitioners’ personal expenses or expenses of the corporation.
Petitioner contends that WTS was an active business that was
distinct from the corporation and that WTS paid or incurred the
expenses in question. Although WTS had few clients in 2000 and
2001, petitioner contends WTS “was making proposals all over the
country” trying to generate business.
We agree with respondent that it is unclear whether WTS was
a separate business. WTS reported no gross receipts in the years
at issue. It conducted limited activities and had only one
client, which eventually chose to do business with the
corporation. Although petitioner claims WTS was attempting to
generate business, he did not provide WTS brochures, marketing
materials, or other evidence of WTS’s sales efforts. Petitioner
introduced a balance sheet and income statement for the
corporation, but petitioner did not produce any accounting
records for WTS. While petitioner maintains that WTS was
separate from the corporation, he testified that he “made no
distinction between * * * [his] employment and * * * [his] home-
based business because * * * they were one and the same thing.”
It is not entirely clear what petitioner meant by this comment;
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