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corporation is “doing business is not necessarily dependent on
the quantum of business and [the] business activity may be
‘minimal.’” Id. (quoting Britt v. United States, 431 F.2d 227,
235, 237 (5th Cir. 1970)).
The Court finds that PPS was in existence, and as such, it
is a separate taxable entity for the following reasons: (1) PPS
served its organizational purpose in that a potential investor
required its formation before he would invest in 2001; (2) it
held itself out as actively engaged in business when it submitted
a business proposal to the U.S. Postal Service and actively
sought other investors in 2001; (3) it adopted a contract with a
law firm in 2001 to negotiate and interpret agreements with
investors so that it could obtain venture capital; (4) it applied
for and received an employer identification number in 2001; (5)
it opened a bank account; and (6) the record contains invoices
for purchases of machinery and equipment that were issued in
PPS’s name and dated February 15 and May 15, 30, and 31, 2002,
which were paid by company checks or credit cards.
Because petitioners have not proven that any of the $47,521
in Schedule C expenses were paid or incurred by petitioner in his
individual capacity rather than by PPS and the Court has
determined that PPS was a separate taxable entity, it follows
that petitioners are not entitled to deduct the expenses claimed
on the Schedule C attached to their 2002 joint Federal income
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Last modified: November 10, 2007