Johnson v. Commissioner
United States Tax Court
Petitioners and their children were the only shareholders of a "subchapter S corporation." The corporation distributed cash to the shareholders disproportionately to their stock ownership. Petitioners, on their income tax returns, allocated the dividends differently than they were actually distributed, relying upon sec. 1.1375-3(d), Income Tax Regs.Held: Sec. 1.1375-3(d), Income Tax Regs., is derived from sec. 1375(c), I.R.C. 1954, as amended.
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Petitioners and their children were the only shareholders of a "subchapter S corporation." The corporation distributed cash to the shareholders disproportionately to their stock ownership. Petitioners, on their income tax returns, allocated the dividends differently than they were actually distributed, relying upon sec. 1.1375-3(d), Income Tax Regs.Held: Sec. 1.1375-3(d), Income Tax Regs., is derived from sec. 1375(c), I.R.C. 1954, as amended. Sec. 1375(c), like sec. 482, I.R.C. 1954, may be invoked and applied only by the Internal Revenue Service and not by a taxpayer.
1Opinion of the Court
Goffe, Judge-.
The Commissioner determined the following deficiencies in petitioners’ Federal income tax:
Taxable year Deficiency
1975 ....$10,981.17
1976 . 22,856.96
1977 . 15,896.84
In the statutory notice of deficiency, the Commissioner determined several adjustments to petitioners’ liability but the petition contained only an allegation of error as to one adjustment determined for each of the 3 years; therefore, only that adjustment is before the Court. The sole issue to be decided is whether petitioners are taxable in full upon the undistributed taxable income and cash distributions from a…
2Cases cited2 opinions
- Interstate Fire Insurance Company v. United StatesDistrict Court, E.D. Tennessee · 1963
- Morton-Norwich Products, Inc. v. United StatesUnited States Court of Claims · 1979
3Cited by2 opinions
- Richard L. Johnson and Ruth W. Johnson v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1983
- Johnson v. CommissionerUnited States Tax Court · 1981