1983-682 Webster, Larry E. and Anne H.
1983-782 Wein, David, Inc. 1983-724 Weissman, David J. and Anne M.
1983-788 Wells, Samuel 1983-788 Wells, Samuel and Ann 1983-553 Westent, Inc. 1983-392 Wichacheewa, Pichai P. and Oranuch
1983-620 Wigutow, Marcus and
Estate of Rose; Eliza
beth and Marcus; and Marcus Wigutow, M.D., Inc.
1983-656 Willard, George M. and
1983-656 Willard, William H. and Judith T.
1983-584 Winter, George, Jr. 1983-782 Wisotsky, Charles and Eva
1983-467 Witten, Louis J. and
1983-764 Woesner Abstract & Title Co.
1983-633 Wohl, Alvin R. and Donna
1983-488 Wood, John G. and Ella P.
1983-763 Wood, Quentin E. and Louise L.
1983-707 Wright, Larrimore and Mary M.
1983-688 Yoder, Eli B. and Emma
1983-604 Young, Barbara E. 1983-604 Young, David L. 1983-633 Young, Robert D. and Barbara J.
1983-686 Young, Seth Edward, Jr., Estate
1983-688 Yutzy, Ammon E. and Mary E.
1983-660 Zamora, Donald R. 1983-513 Zechiel, Lois 1983-652 Zeropack Co. 1983-716 Zingaro, James C. 1983-597 Zohoury, Badi and Wil
ACCOUNTING METHODS
See also DEPRECIATION and PARTNERSHIPS.
Change of Capitalization Method to LIFO Inventory Meth- od-Real Property Not "Merchandise."-Commissioner did not abuse his discretion in rejecting use of LIFO inventory method under sec. 472 by petitioner real estate developer, since homes or lots which petitioner sold were real estate and not "merchandise" within meaning of reg. 1.471-1, method used by petitioner in 1973 and prior years was method of capitalization under sec. 263(a) which clearly reflected its income and was not inventory method within meaning of sec. 471, petitioner was neither required nor permitted to use inventories, and because Commissioner did not consent to petitioner's changing to such method, petitioner's use of the method was improper (sec. 446(e)). W. C. & A. N. Miller Development Co. v. Commissioner
ACCUMULATED EARNINGS TAX
Burden of Proof-Statement by Taxpayer-Effect of Tax Court Discovery Rules on Sec. 534(c) Requirements.-Where petitioner corporation moved under Rule 142(e) for pretrial ruling that its statement submitted under sec. 534(c), relating to grounds for accumulation of its earnings and profits, was sufficient to shift burden of proof to Commissioner, Court determined (1) as to seven grounds asserted by petitioner in its sec. 534(c) statement to support its contention that its earnings and profits were not permitted to accumulate beyond the reasonable needs of business, burden of proof shifted to Commissioner as to only two grounds for which its statement set forth facts sufficient to show basis thereof, and (2) in light of statutory purpose to encourage taxpayer to "show its hand" while case is still under administrative consideration, opportunity for discovery under Tax Court Rules does not affect scope of facts to be included in petitioner's sec. 534(c) statement to support the grounds alleged. Rutter v. Commissioner
See also INCOME and UNITED STATES TAX COURT.
Fraud-Submission of False Information as Evidence of Intent To Evade Tax-Tax Protester.-Where petitioner knowingly filed false W-4 forms for 1979, deliberately falsified his W-2 forms, and filed inadequate returns, Court determined petitioner was liable for sec. 6653(b) addition to tax for fraud, since evidence showed he intended to evade payment of tax he knew he owed. Raley v. Commissioner, 676 F.2d 980 (3d Cir.), distinguished. Hebrank v. Commissioner ...
Late Filing-Negligence-Purported Charitable Contributions to "Church" Used for Personal, Family, and Living Expenses. (1) Petitioners were liable for sec. 6651(a) additions to tax, since having offered no explanation for delinquent filing of their 1979 return, they failed to carry their burden of proving that the delinquency was due to reasonable cause and not to willful neglect, and (2) petitioners were liable for sec. 6653(a) additions to tax for negligence or intentional disregard of rules and regulations for 197679, absent any explanation for omission of interest and dividend income for 1978-79 and for their inconsistent action of claiming as charitable contributions to their "church," funds which were used for their nondeductible personal, family, and living expenses. Davis v. Commissioner
Negligence-Tax-Avoidance Scheme.-Where petitioner's taxavoidance scheme was flagrant attempt to assign wage income and to claim deductions in an amount 10 times as great as actual expenditures, Court determined sec. 6653(a) negligence addition was wholly justified, since petitioner's testimony was unworthy of belief, and no reasonable person could believe such a "pie-in-the-sky" scheme. Benningfield v. Commissioner ..
Predivorce Support Agreement-W's Pending RemarriagePresumption of Merger Into Divorce Decree Under State Law Rebutted by Parties' Intent.-Where in 1973 before their divorce, H and W executed an agreement providing for monthly payments to W for her support and maintenance over 20-year period; at the time, W's pending remarriage was known to H; and agreement was incorporated by reference into divorce decree; Court determined, for taxable years 1975-77, (1) H's payments to W constituted gross income to W under sec. 71(a) and were deductible by H under sec. 215; (2) no portion of payments constituted nontaxable payments for support of minor children under sec. 71(b), since no specific designation was made; (3) under Illinois law, presumption of merger of agreement into divorce decree was rebutted by parties' intent to the contrary, and prior agreement retained its independent legal significance (Hoffman v. Commissioner, 54 T.C. 1607, distinguished); (4) despite automatic termination of maintenance and support on remarriage under State law, H's legal obligation to pay contractual
support under agreement was not relieved, and payments qualifying under secs. 71(a) and 215(a) for tax purposes could legally continue as such under agreement; and (5) qualification of payments under both 71(a)(1) and 71(a)(2) was not precluded by sec. 71(a), since dual qualification results from dual remedies available under decree and agreement where agreement is incorporated, but does not merge, into decree. Mass v. Commissioner
AMORTIZATION
See DEPRECIATION.
CAPITAL GAINS AND LOSSES See also INCOME.
Forgiveness-of-Indebtedness Income-Release From Prior Loans in Exchange for Stock-Guarantee Agreement as True Debt or as Substitute for Prior Debt.—Where petitioner A and B formed company to construct and sell townhouses; new investors entered venture by purchasing shares and lending money to A and B; and later new investors had disagreement with A and B relative to company and repayment of the loans, Court determined A had forgiveness-of-indebtedness income upon execution of settlement agreement, whereby A and B transferred their stock in venture to new investors for release from loan obligations, since even though guarantee agreement executed on same day was inseparable from settlement agreement, on facts, guarantee agreement was too contin- gent to be treated as a true debt (CRC Corp. v. Commissioner, 693 F.2d 281 (3d Cir.), and Brountas v. Commissioner, 692 F.2d 152 (1st Cir.), followed) or as indebtedness which refinanced prior liability. Zappo v. Commissioner
CHARITABLE CONTRIBUTIONS See INCOME.
"Group-Term" Insurance Premiums Paid by Family Corpora- tion-Deductibility by Company-Taxability to Insured.-Pre- miums paid by A's family corporation X on $1 million whole life policy on A's life were not deductible by X, since term insurance coverage was not intended as past or present compensation for services of A, who had retired as president, but were in response to A's estate-planning requirements, and X failed to show premiums were ordinary and necessary business expenses; and exemption of premiums from A's income was not available under sec. 79(b)(1), since insurance was not "group-term" life insurance under sec. 79 because plan adopted by X did not preclude "individual selection" of amounts of insurance within meaning of regs. in effect in 1974-75. Whitcomb v. Commissioner
See also ADDITIONS TO TAX and EVIDENCE.
Charitable-Universal Life Church-Burden of Proof.-Peti- tioners failed to carry their burden of proving that they made any charitable contributions to Universal Life Church, Inc., in California, considering that all checks except one were deposited into "church" accounts over which petitioner wife had sole signatory power; nor were petitioners entitled to deductions for charitable contributions to their own Universal Life Church "chapter," since petitioners' re- tained control and personal benefit precluded a finding of gift, there was no evidence regarding the organization and operation of their chapter or of the distribution of its assets upon dissolution, and the net earnings of their chapter inured to their benefit. Davis v. Commissioner
CORPORATIONS
See also GAIN OR LOSS.
Foreign Subsidiaries-Bona Fides Commissioner's Alloca- tion of Income.-Where petitioner corporation, which had previous- ly owned and managed hospitals in United States, organized in Cayman Islands X corporation as first-tier subsidiary to serve as umbrella company for expansion into foreign countries, and Y corporation as second-tier subsidiary to obtain and perform manage- ment contract with Kingdom of Saudi Arabia, and petitioner did not include any income from contract on its 1973 tax return, Court determined, on record, (1) Y was not a sham corporation but was separate entity for Federal tax purposes, since Y was organized for business purpose and actually carried on some business activities in 1973; (2) petitioner did not transfer any property to Y that would have required advance ruling by Commissioner under sec. 367, since petitioner's presenting Y with opportunity to enter contract did not transfer any legally enforceable contractual or other right to Y that constituted "property" under sec. 351 or 367; (3) petitioner did not receive stock in Y in exchange for its services in negotiating contract; and (4) 75% of Y's taxable income was allocable to petitioner under sec. 482 to take into account petitioner's services to its controlled second-tier subsidiary, Y, in lending personnel and intangibles to Y without compensation. Hospital Corp. of America v. Commis- sioner
Merger Qualification as Sec. 368(a)(1)(F) Reorganization- Net Operating Loss Carryback.-Merger of corporation X into petitioner corporation Y did not qualify as sec. 368(a)(1)(F) reorgani- zation, since under rule stated by 9th Circuit, business of X was not continued by Y following their merger, so that Y's net operating loss could not be carried back to offset X's income for taxable year beginning May 1, 1973. Mariani Frozen Foods, Inc. v. Commis- sioner
« PreviousContinue » |