If you want to claim the benefits of a corporation, you've got to actually use the corporation for business, not just pass funds through the corporate bank account. In one case the Tax Court disregarded the taxpayer's corporation, finding it to be a sham.

The corporation observed none of the formalities of a corporate entity such as shareholder meetings, issuing stock certificates, invoices were not made out in the corporate name, etc. The Tax Court attributed all the income to the taxpayer. There can be nontax consequences too.

K.R. Hoffman & Co., LLC, helps Entrepreneurs, Professionals and Select Individuals in taking control of their taxes and understand their financial affairs. Discover how we can help you with your business and tax challenges. For more inforamtion or to become a client, call me at (954) 591-8290 or drop me a note.