Gunasundran R. Pillay and Kalaivani Govender - Page 8

                                        - 7 -                                         
          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;             









Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011