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Rules of Practice and Procedure.
Respondent determined deficiencies in petitioner’s Federal
income taxes for taxable years 2002 and 2003 in the amounts of
$10,021.60 and $11,841.60, respectively. The issue for decision
is whether petitioner was a personal service corporation in the
tax years in question and accordingly subject to a special flat
tax rate of 35 percent.
Background
This case was submitted fully stipulated pursuant to Rule
122. The stipulation of facts and the attached exhibits are
incorporated herein by reference. At the time the petition was
filed, petitioner’s place of business was in Syracuse, New York.
Petitioner filed a Form 1120, U.S. Corporation Income Tax
Return, for the taxable years 2002 and 2003.
At all times during 2002 and 2003, petitioner was
incorporated under the laws of New York. Petitioner’s shares at
the end of both of the years at issue were held as follows:
Lawrence Apgar 122 shares
James Oliver 50 shares
Treasury shares 172 shares
On Schedule E1 of the Form 1120, however, filed for taxable
1 Schedule E, Compensation of Officers, of Form 1120
requires the corporation to provide certain information,
including the names of officers, and the percentage of
corporation stock owned by each officer.
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Last modified: November 10, 2007