Albert J. Fihe and Elizabeth Fihe v. Commissioner of Internal Revenue
Opinion
Opinion
Fee, J.
This is an appeal from the determination of the Tax Court upholding certain assessments of the Commissioner of Internal Revenue against the Fihes.
Albert J. Fihe is a practicing lawyer with a specialty in the field of patents and trademarks. He obtained, in 1937, a patent on a hamburger patty molding machine for one Harry Holly. A partnership was formed consisting of Albert J. Fihe and Holly, which continued until January, 1945, when Elizabeth Fihe and the wife of Holly were taken in as partners. The operation was profitable from this point. On September 25, 1946, an Illinois corporation, Holly Molding Devices, Inc., was organized. Each of the four partners received fifty shares of stock, which constituted the total issue.
Albert Fihe was advised of a plan involving Holly, an internal revenue agent and the auditor of the company to defraud the government of income taxes. He reported the matter, and the Federal Bureau of Investigation furnished him with marked money which he gave to the agent. As a result, Holly, the auditor of the company and the agent were convicted and served terms in federal penitentiaries. Thereupon, the Fihes sold their stock in the corporation.