Wagner v. Commissioner
| Decision Date | 16 June 1958 |
| Docket Number | 56823,56837,55923-55932,56840.,Docket No. 50430-50433 |
| Citation | 1958 TC Memo 112,17 TCM (CCH) 569 |
| Parties | John P. Wagner et al. v. Commissioner. |
| Court | U.S. Tax Court |
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John S. Best, Esq., 110 East Wisconsin Avenue, Milwaukee, Wis., and Roy C. LaBudde, Esq., for the petitioners. John L. Pedrick, Esq., and John E. Owens, Esq., for the respondent.
Memorandum Findings of Fact and Opinion
Respondent determined deficiencies and overassessments in income, excess profits, and declared value excess profits taxes of the following petitioners in the amounts and for the years as set forth below:
Petitioners in Docket Nos. 50433, 50430, 50431, and 50432 were each notified of the deficiencies as above set forth by statutory notices dated June 24, 1953. Petitioners in Docket Nos. 56840, 56823, and 56837 were each notified of the deficiencies as set forth above by statutory notices dated December 22, 1954.
Respondent, by statutory notices dated October 19, 1954, determined deficiencies for the years indicated against the following petitioners as transferees of the assets of Transit Bus Sales:
Docket
Petitioner No. 1941 1942 1943 1944 1945 1946 1947 Total
1. Grace Patricia Goemans Trust .......... 55923 $ 4,373.79 $1,750.58 $ 5,034.52 $15,749.19 $30,594.50 $ 9,656.80 $15,632.68 $ 82,792.06
2. Mazie F. Wagner ....................... 55924 11,025.18 4,412.77 12,690.72 39,699.56 77,120.75 24,342.26 39,405.90 208,697.14
3. Edward M. Goemans ..................... 55925 Transferee liability determined to be $705,476.76, equalling total of deficiencies
determined as to Transit Bus Sales.
4. Leo G. Roemer ......................... 55926 1,537.92 615.54 1,770.24 5,537.74 10,757.68 3,395.53 5,496.78 29,111.43
5. Agnes G. Roemer ....................... 55927 1,500.93 600.74 1,727.68 5,404.58 10,498.98 3,313.88 5,364.60 28,411.39
6. Christine Goemans ..................... 55928 7,782.91 3,115.07 8,958.65 28,024.77 54,441.16 17,183.72 27,817.47 147,323.78
7. Margaret Eliz. Goemans Trust .......... 55929 4,373.79 1,750.59 5,034.52 15,749.19 30,594.50 9,656.80 15,632.68 82,792.07
8. John Walter Goemans Trust ............. 55930 4,373.79 1,750.58 5,034.52 15,749.19 30,594.50 9,656.80 15,632.68 82,792.06
9. John P. Wagner ........................ 55931 17,756.37 7,106.93 20,438.87 63,937.63 124,205.82 39,204.11 63,464.66 336,114.39
10. Jacqueline Gretchen Goemans Trust ..... 55932 4,373.79 1,750.58 5,034.52 15,749.19 30,594.50 9,656.80 15,632.68 82,792.06
The deficiencies as stated above with respect to transferee liability are predicated upon respondent's determination that the following assets of Transit Bus Sales were transferred to the persons named below in the amounts and in the years indicated:
Petitioner 1943 1944 1945 1946 1947 1948 1949 1950 Total
1. Grace Patricia Goemans Trust ....... ........ $ 1,821.94 $ 18,559.05 $ 18,328.76 $ 44,082.31 ......... ......... ......... $ 82,792.06
2. Mazie F. Wagner .................... $6,681.22 24,815.28 70,082.81 33,093.41 49,523.02 ......... ......... $24,501.40 208,697.14
3. Edward M. Goemans .................. 9,854.21 79,536.82 199,600.02 142,898.26 218,092.04 $5,000.00 ......... 77,004.40 731,986.75
4. Leo G. Roemer ...................... ........ 1,421.35 6,186.35 6,109.59 14,694.10 ......... ......... 700.04 29,111.43
5. Agnes G. Roemer .................... ........ 1,421.35 6,186.35 6,109.59 14,694.10 ......... ......... ......... 28,411.39
6. Christine Goemans .................. 6,681.22 30,586.53 72,803.78 26,370.83 10,881.41 ......... ......... ......... 147,323.77
7. Margaret Eliz. Goemans Trust ....... ........ 1,821.96 18,559.04 18,328.77 44,082.30 ......... ......... ......... 82,792.07
8. John Walter Goemans Trust .......... ........ 1,821.94 18,559.05 18,328.76 44,082.31 ......... ......... ......... 82,792.06
9. John P. Wagner ..................... 4,535.87 29,821.19 93,604.59 58,511.63 97,838.25 ......... ......... 51,802.96 336,114.49
10. Jacqueline Gretchen Goemans Trust .. ........ 1,821.94 18,559.05 18,328.77 44,082.30 ......... ......... ......... 82,792.06
The issues involved are: (a) Whether or not the income of the various partnerships and corporations connected with petitioner, Transit Bus Sales, (as will be more fully set out infra), may be imputed to Transit Bus Sales under either or all of sections 22(a), 45, or 129, Code of 1939; (b) whether or not compensation paid to two of the officers of Transit Bus Sales during some or all of the years 1941-1947, inclusive, was reasonable; (c) whether or not $3,000 paid by Transit Bus Sales to one of its officers, Edward M. Goemans, in each of the years 1943, 1944, and 1945, constituted an ordinary and necessary expense, and was deductible as such under section 23(a), Code of 1939; (d) whether or not the said $3,000 payments are includible in the income of petitioner, Edward M. Goemans, in the years in which received; (e) whether the gain derived from the sale of certain used buses is taxable at ordinary income or capital gain rates; (f) whether or not various of the petitioners are liable as transferees of Transit Bus Sales, or as transferees of transferees of Transit Bus Sales; (g) whether, if the income of the various partnerships and corporations connected with Transit Bus Sales may not be imputed to that corporation, it may be imputed to petitioners Edward M. Goemans, John P. Wagner, and Leo G. Roemer.
Some of the facts have been stipulated, and are found as stipulated and incorporated herein by this reference.
Edward M. Goemans (hereinafter referred to as Goemans), petitioner in Docket Nos. 50431, 55925, and 56840, and Christine Goemans (hereinafter referred to as Christine, petitioner in Docket No. 55928, are husband and wife. John P. Wagner (hereinafter referred to as Wagner), petitioner in Docket Nos. 50430, and 55931, and 56823, and Mazie F. Wagner, (hereinafter referred to as Mazie), petitioner in Docket No. 55924 are husband and wife. Leo G. Roemer (hereinafter referred to as Roemer), petitioner in Docket Nos. 50432, 55926, and 56837, and Agnes G. Roemer, petitioner in Docket No. 55927, are husband and wife. Agnes G. Roemer is a sister of Goemans. During the taxable years here involved, the parties resided in Milwaukee, Wisconsin.
The Grace Patricia Goemans Trust, the Margaret Elizabeth Goemans Trust, the John Walter Goemans Trust, and the Jacqueline Gretchen Goemans Trust, petitioners, respectively, in Docket Nos. 55923, 55929, 55930, and 55932, are trusts created by Goemans in November 1944, for the benefit, respectively, of his four children.
Transit Bus Sales (hereinafter referred to as Sales), petitioner in Docket No. 50433...
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