Mel Dar Corporation, a Corporation v. Commissioner of Internal Revenue, Coy Burnett and Mildred K. Burnett v. Commissioner of Internal Revenue

Petitioners, Coy Burnett and Mildred K. Burnett, are husband and wife who- duly filed joint income tax returns for the calendar years 1951 and 1952. In 1957 the Commissioner of Internal Revenue assessed deficiencies in taxes against them for 1951 in the amount of $48,160.-92 and for 1952 in the amount of $78,-905.72. Petitioner Mel Dar Corporation is a Nevada corporation with its principal place of business in Los Angeles, California, which is wholly owned by the Burnett family. Using the accrual method of accounting, Mel Dar duly filed its tax returns for the fiscal years 1952 and 1953 covering the period beginning with May 1, 1951 and ending April 30, 1953. The Commissioner in 1955 assessed against Mel Dar deficiencies in income and excess profits taxes in the amount of $62,772.68 for fiscal 1952 and $7,733.28 for fiscal 1953. The Burnetts and Mel Dar filed petitions in the Tax Court for redetermination of deficiencies. The petitions were consolidated for trial in the Tax Court due to common issues of fact and law. The Tax Court had jurisdiction by virtue of section 272(a) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 272 (a). After decisions favorable to the Commissioner…