TAX COURT OPINION

Case: Marlyn R. & Donna M. Tramm
Docket Number: 22094-09S
Judge: Colvin
Opinion Type: bench
Filed: 05/28/2010
Pages: 6

UNITED STATES TAX COURT WASHINGTON , DC 2021 7 MARLYN R . & DONNA M . TRAMM, Petitioners, v . ) Docket No . 22094-09 S COMMISSIONER OF INTERNAL REVENUE, Respondent . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice an d Procedure, it is ORDERED that the Clerk of the Couri shall transmit herewith to petitioners and to respondent a copy-of the pages of the transcript of the proceedings in the above case before Judge Laurence J . Whalen at St . Paul, Minnesota, containing his oral findings of fact and opinion rendered on April 15, 2010 . In accordance with the oral findings of fact and opinion, decision will be entered for petitioners . (Signed) Laurence J . Whalen Judge Dated : Washington, D .C . May 28, 2010 SERVED JUN - ' 2010 d 3 1 Bench Opinion by Sr . Judge Lau,'rence J . Whalen 2 Marlyn R . & Donna M . Tramm , Docket 22094-09 S 3 April 15, 2010 4 5 The Court has decided to render ora l 6 findings of fact and opinion i n this case, and th e 7 following represents the Courti's oral findings of fact 8 and opinion . 9 II . 10 This case was heard as a small tax case 11 pursuant to the provisions of (section 7463 of the 12 Internal Revenue Code of 1986, as amended, and Rule s 13 170 through 175, of the Tax Court Rules of Practic e 14 and Procedure . Hereinafter, all section numbers refer 15 to the Internal Revenue Code,a s amended , and all Rul e 16 references are to the Tax Court Rules of Practice and 17 Procedure . 18 19 III . This bench opinion is made pursuant to the 20 authority granted by section 71459(b) and Rule 152 . 21 IV . 22 Marlyn R . Tramm, petitioner, represented 23 himself and Mrs . Donna M . Tramm in these proceedings . 24 Ms . Lisa R . Woods, Attorney At Law, represente d 25 respondent . In this bench opinion, references t o Heritage Reporting Corporation (202) 628114888 4 1 petitioner are to Mr . Tramm . 2 V . 3 Respondent determined a deficiency i n 4 petitioners ' 2007 income tax in the amount of $ 6,311, 5 together with a penalty under section 6662 ( a) in the 6 amount of $ 1,262 . The principal adjustment in th e 7 notice of deficiency , and the only adjustment at issue 8 in these proceedings , was an increase of $22,672 i n 9 petitioners ' gross income . This amount was reporte d 10 to respondent on Form 1099 by Kevin Tramm 11 Construction, Inc ., as having been paid to "Marlin" -- 12 M-A-R-L - I-N -- "Tramm" during the year as nonemployee 13 compensation . 14 During calendar year 2007 , Kevin Tramm 15 Construction , Inc ., issued the following four checks 16 payable to the order of "Marlin Tramm" . The date and 17 amount of the checks is as follows : January 2, 2007, 18 $3,000 ; March 16, 2007, $1,200 ; September 27, 2007, 19 $6,000 ; December 14, 2007, $12 , 000 ; for a total o f 20 22,200 . 21 The difference between the above total , 22 $22,200 , and the amount reported on Form 1099 ,$22,672 - 23 - that is , $ 472 -- is not disclosed in the record o f 24 this case . 25 Kevin Tramm Construction , Inc ., also issued Heritage Reporting Corporation (202) 628-4888 5 1 a check on April 19, 2007, inithe amount of $10,000 2 made payable to "Marlyn " -- L-I -- "Tramm" . Thi s 3 check was issued in repaymen t f a loan in the amoun t of $10,000 . 5 After serving in the United States Arm y 6 during the Korean War, petitioner became a teacher in 7 the St . Paul public school system . Circa 1968, he 8 became involved in the home construction business on a 9 limited scale . For a number of years, he remained a 10 full-time teacher and a part-time home builder . In 11 1983, he resigned his teaching position and became a 12 full-time home builder . 13 At some time, petitioner formed Mardon 14 Homes, Inc ., a solely owned subchapter C corporation . 15 Petitioner sometimes uses the name " Marlin Tramm" fo r 16 his corporation . During 1993 , his company suffered a 17 substantial loss after the company started a housing 18 project for which it was not able to obtain financing . 19 In 1994 , petitionerlinvested in Kevin Tramm 20 Construction, Inc ., a company}formed by petitioners ' 21 son . Petitioner ' s company , Mardon Homes, Inc ., became 22 a subcontractor for his son ' s .company , Kevin Tramm 23 Construction , Inc . Acting on behalf of Mardon Homes, 24 Inc ., petitioner has consulted with Kevin Tram m 25 Construction, Inc . Petitioner has never personally Heritage Reporting Corporation (202) 628=4888 6 1 worked for his son's company or been employed by that i 2 company . 3 On March 31, 2010, Mardon Homes, Inc ., file d 4 its Federal income tax return (cid:127)on I .R .S . Form 1120 for 5 fiscal year ending May 31, 2008 . That return reported 6 gross receipts of $25,443 . This amount includes th e 7 $22,672 that was reported on Form 1099 as nonemployee 8 compensation paid to petitioner . VI . 10 The deficiency at issue in this case i s 11 based upon the premise that petitioner earne d 12 nonemployee compensation of $242,672 during 2007 fo r 13 services provided to Kevin Tramm Construction, Inc ., 14 as reported on Form 1099 issued to petitioner by that 15 company . Petitioner asserts that he did not provide 16 any services to Kevin Tramm Construction, Inc ., and 17 that the Form 1099 was issued in error . He further 18 asserts that his services were provided to Mardo n 19 Homes, Inc ., and that corporation reported the amount 20 at issue, $22,672, as income on its return for fiscal 21 year ending May 31, 2008 . 2 2 23 VII . We have reviewed the' record of this cas e 24 consisting of the stipulation of facts, firs t 25 stipulation of facts, the exhibits attached to those Heritage Reporting Corporatio n (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 6 1 7 1 8 1 9 2 0 2 1 2 2 23 2 4 25 7 stipulations, and the testimony of petitioner and hi s accountant . We accept, as true, petitioner's factua l assertion that he provided nogservices to Kevin Tramm Construction, Inc .,during 2007, and that the Form 109 9 issued by Kevin Tramm Construction, Inc ., in th e A amount of $22,672 was issued in error . VIII . ' To reflect the foregoing, decision will be entered for petitioner . IX . This concludes the Court's oral findings o f fact and opinion in this case . (Whereupon, at 5 :07 p .m ., the bench opinio n in the above-entitled matter was concluded . ) / / Heritage Reporting Corporation (202) 628-4888