Jon J. Paulson Gloria J. Paulson v. Commissioner of Internal Revenue

Jon J. Paulson and Gloria J. Paulson, hus band and wife, appeal from the tax court’s 1 decision sustaining deficiencies assessed by the Commissioner in their federal income taxes for the years 1984 and 1985. We affirm.

Prior to September 1983, Jon Paulson practiced veterinary medicine in a partnership called Western Veterinary Service (WVS). On the advice of James and Joan Noske, the partners changed the form of their business from a partnership to a business trust in the fall of 1983, creating Western Veterinary Company (WVC). 2 The trustees named in WVC’s declaration of trust were…