Le

MEMORANDUM **

The Tax Court’s factual finding that Dr. Le operated his medical practice as a cor *804 poration during 1990 and 1991 is not clearly erroneous. Indeed, the evidence supporting this conclusion is overwhelming.

The corporation’s failure to comply with California’s statutory requirements necessary to maintain its corporate privileges does not shield it from its federal tax obligations. See O’Neill v. C.I.R., 271 F.2d 44, 49 (9th Cir.1959). In such circumstances, the Commissioner may recognize a de facto corporation for federal tax purposes. Id. Moreover, a taxpayer may not be heard to challenge his prior election of the existence of a business entity for tax purposes once the existence of that entity becomes inconvenient. See McManus v. C.I.R., 583 F.2d 443, 447 (9th Cir.1978) (“A taxpayer is estopped from later denying the status he claimed on his tax returns.”); Maletis v. United States, 200 F.2d 97, 98 (9th Cir.1952) (“The burden is on the taxpayer to see to it that the form of business he has created for tax purposes, and has asserted in his returns to be valid, is in fact not a sham or unreal.”).

The Tax Court’s factual findings that the Petitioners diverted…