Raymond L. Monk, Jr. - Page 11




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          long time ago.  Maney believed that his 40-year-old felony                  
          conviction would make fulfillment of his dream of owning a bar              
          impossible if he filed for the licenses himself.  So Monk filed             
          the paperwork for him, not realizing how much it might matter               
          whose name was on the liquor and lottery licenses or on the bank            
          account.  (Though we assert no expertise in Maryland                        
          administrative law, it seems unlikely that either Monk or Maney             
          will benefit from the position on the true ownership of Chuck’s             
          Place that they have taken in this case when Maryland authorities           
          learn of it, further bolstering their credibility on this point.)           
               In situations like this, where there is written                        
          documentation which contradicts the reality of a situation, we              
          disregard the documents to properly tax the person actually                 
          earning the income.  We did just this in the very similar case of           
          Malone v. Commissioner, T.C. Memo. 2005-69, where we held that a            
          family music business should be taxed to the children who                   
          actually ran the business and not to the parents whose names were           
          on the legal paperwork.  “[A]lthough not determinative in a                 
          general sense, in a labor-intensive business with no employees,             
          there is a strong suggestion that the individuals performing the            
          labor own the business.”  Id.  Likewise, we find in this case               
          that the profits and losses from Chuck’s Place are not assignable           
          to Monk, who had no real involvement in the business, despite the           
          fact that he put his name on the paperwork.                                 







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