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Respondent determined a deficiency of $1,681 in petitioner’s
Federal income tax for 2002.
The sole issue for decision is whether petitioner, under
section 1366, is required to include as income on his 2002
Federal income tax return his proportionate share of
undistributed income from an S corporation in which he was a
shareholder with his former wife.2
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and made part hereof.
Petitioner’s legal residence was Seminole, Florida, at the time
the petition was filed.3
Petitioner was married to Cheryl L. Sweeney during the year
at issue. During the year 2000, petitioner and his wife
incorporated Lake Vista Billing Services, Inc. Petitioner was
the registered agent for the corporation; his wife was the
president, and petitioner was vice president and a stockholder.
The stated purpose for the corporation was “medical billing for
2At trial, petitioner conceded the following adjustments in
the notice of deficiency: (1) Disallowance of a dependency
exemption deduction for a child; (2) disallowance of a child and
dependent care credit under sec. 21(a)(1); (3) disallowance of
the child tax credit under sec. 24; and (4) a computational
disallowance of miscellaneous itemized deductions.
3Under sec. 7491(a), where a taxpayer introduces credible
evidence with respect to any factual issue relevant to
ascertaining the liability of the taxpayer, the burden of proof
shifts to the Commissioner. There are no factual issues in this
case. The sole issue is a question of law; consequently, this
case is decided without regard to the burden of proof.
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Last modified: May 25, 2011