TAX COURT OPINION

Case: Robert Toriano Malone
Docket Number: 22649-07S
Judge: Colvin
Opinion Type: bench
Filed: 07/11/2008
Pages: 4

UNITED STATES TAX COURT WASHINGTON , D .C . 2021 7 STAT . Docket No . 22649-07 S ROBERT TORIANO MALONE, Petitioner , v . COMMISSIONER OF INTERNAL REVENUE , Respondent . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Diane L . Kroupa at Memphis, Tennessee on June 10, 2008, containing her oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed ) Diane L. Kroupa Judg e Dated : Washington, D .C . July 1 1, 2008 SERVED JUL 1 1 2008 2 1 Bench Opinion by Judge Diane L . Kroupa June 10, 200 8 2 Malone v . Commissioner Docket No . 22649-07 S 3 THE COURT : The Court has decided to render 4 oral findings of fact and opinion in this case, and 5 the following represents the Court's oral findings of 6 fact and opinion . These oral findings of fact an d 7 opinion shall not be relied upon as precedent in any 8 other case . 9 This proceeding was conducted as a Small Tax 10 Case under section 7463 and Rules 170 through 175 . 11 This bench opinion is made pursuant to the authority 12 granted by section 7459(b) and Rule 152 . All section 13 references are to the Internal Revenue Code for 2004, 14 the year at issue, and all rule references are to the 15 Tax Court Rules of Practice and Procedure . 16 Robert Malone appeared on his own behalf, 17 and Caroline Krivacka appeared on behalf o f 18 respondent . 19 FINDINGS OF FAC T 20 Certain facts have been stipulated . The 21 stipulation of facts the parties filed, wit h 22 accompanying exhibits, is incorporated by this 23 reference, and the facts are so found . 24 Petitioner resided in Tennessee at the time 25 he filed the petition in this case . Heritage Reporting Corporation (202) 628-4888 3 1 Petitioner was employed during 2004 as an 2 air traffic controller for the U .S . Department o f 3 Transportation, earning $63,948 in wages . Petitioner 4 timely filed a return for 2004 and attached a Schedule 5 C, entitled, Self-employment relating to the musi c 60- 6 industry . 7 Petitioner played in a band called "A Game 8 Entertainment" and he incorporated a business by the 9 same name . 10 Petitioner incorporated A Game Entertainment 11 as a regular C corporation and did not elect to b e 12 treated as a subchapter S corporation . Petitione r 13 stated he incorporated as a corporation to protect the 14 name on March 21, 2003 . 15 The Schedule C reflected that A Gam e 16 Entertainment was in the music production business, CD 17 production and band performance . No income wa s 18 reported by A Game Entertainment for 2004 . Ye t 19 $29,304 of expenses were claimed on the Schedule C, 20 consisting of 13,850 for car and truck and expenses, 21 $1,500 for legal and professional, 1,000 for repair s 22 and maintenance, $3,000 travel, $750 meals an d 23 entertainment, $8,882 other expenses , and $322 for 24 home office expenses, all claimed on petitioner's 25 individual return . Heritage Reporting Corporation (202) 628-4888 4 1 Petitioner ' s return for 2004 therefore 2 reflects expenses and deductions appropriatel y 3 belonging to the corporation, not petitioner . A Game 4 Entertainment is still a regular C corporation in good 5 standing under Tennessee law . 6 OPINION 7 A corporation is a separate legal entity . A 8 shareholder of a corporation is not entitled to claim 9 expenses of the corporation . 10 We therefore sustain the determination s 11 respondent made in the statutory notice of deficiency 12 issued to petitioner for 2004 . The record is no t 13 clear, however, whether respondent concedes the 14 allowances granted to petitioner on examinatio n 15 including $ 376 .55 for cell phone expenses , $ 175 for 16 repairs and maintenance , and $322 of home offic e 17 expenses . We find that the record does not justify 18 respondent ' s allowances . 19 To reflect the foregoing , decision will be 20 entered for respondent . 21 This concludes our oral findings of fact and 22 opinion in this case . 23 (Whereupon , at 3 :08 p .m ., the bench opinion 24 in the above - entitled matter was concluded . ) 25 Heritage Reporting Corporation (202) 628-4888