Masonry Magazine May 1974 Page. 31
SELF-EMPLOYED
A real estate salesman who was self-employed took the advice of a mutual fund salesman and bought shares in a mutual fund. When he filed his return, the realtor deducted the amount he had paid for the shares as payment to a pension plan.
The Commissioner disallowed the claimed deduction because the taxpayer failed to show that the payments were made pursuant to a written qualified plan. The taxpayer argued that the salesman had fraudulently represented to the taxpayer that the shares would establish and fund a qualified pension plan.
The Tax Court agreed with the Commissioner. The Code requires that a plan covering a self-employed individual who is an owner-employee be established through a definite written program and arrangement. (Vernaccini v. Commissioner, T.C. Memo 1974-66.)
Bruno Furst has made a career of teaching men and women to improve their memories by using certain simple, tested techniques. Here's his easy-to-use method of firmly fixing the name of a person in your mind so you'll remember it the next time you meet him:
* Get the name clearly.
* Repeat the name immediately after the introduction.
* See whether or not the name has a meaning in itself.
* If it has no meaning, find an appropriate substitute.
* Repeat the name several times.
* Write the name down.
SHAREHOLDER-PARTICIPANTS
Shareholder-participants were based solely upon annual salary.
The IRS Commissioner took the position that the shareholders' division of the net profits represented dividends rather than compensation. Therefore, allocation to shareholder-employees based on dividends discriminated against the non-shareholder participants. The shareholders argued that their shares of undistributed net profits were paid by reason of their employment relationship with the corporation rather than as a result of their shareholder relationship. In other words, they argued that the employer's contributions to the profit-sharing plan were based upon annual compensation and not on dividends.
The Tax Court disagreed with the shareholders. It held that the contributions for the shareholder-employees were based, in part, upon the shareholder's shares of the tax-option corporation and did not constitute compensation for the purposes of Code Section 401(a). Discrimination in favor of the shareholders was found to disqualify the employer's contributions for deductibility. (Robertson v. Commissioner, 61 TC-No. 78.)
REFUNDS
The IRS has announced that it will not delay issuing refunds, even on returns that contain "unallowable items." Such items are those than cannot be allowed under any circumstances, such as medical deductions calculated without first excluding 3% of the adjusted gross income. The IRS explained that only the amount of the refund that would be affected by the "unallowable items" would be held up.
SCOOT-CRETE FORKLIFT
Introducing the New Scoot-Crete Forklift. Keep your masons supplied quickly and efficiently with the new Scoot-Crete Forklift. Brick, block, tile, mortar, and other building supplies-get them right up to the work position with smooth, dependable hydraulic power. The Scoot-Crete Forklift handles up to 1500 lbs at 12" centers. It's versatile, too, with a 7½' or 82' mast. A work-ready 8 hp engine provides power. Big 6-gallon reservoir for cooler operation. Built-in safety features for extra value. And you can choose time and work-saving options: adjustable tread width (from 44" to 52")... electric start... and more. The new Scoot-Crete Forklift. Available only from Getman. Get all the facts, today. Write for Bulletin No. 1549.