Peterson v. Commissioner

Order

KERN, Judge: On October 20, 1965, petitioners filed in these proceedings their motions for reconsideration, rehearing, and further trial. Pursuant to proper notice these motions were heard by the Court on December 1, 1965, in Washington, D.C., at which time and place the parties appeared before the Court by counsel who presented oral arguments in addition to their written memoranda theretofore filed herein.

After due consideration of said motions, the arguments of counsel, both oral and written, and the entire record herein, it is

ORDERED: That said motions be granted to the extent and in the manner specified as follows:

1. That our Memorandum Findings of Fact and Opinion filed herein under date of September 21, 1965, be and it is hereby vacated and set aside.

2. That a further hearing be held in these proceedings at Washington, D.C., at a date and time later to be specified, at which hearing only such evidence will be received which is pertinent to the following matters:

(a) The question of whether the fair market value or cost of the facilities and services furnished to the individual petitioners by the corporate petitioner during the taxable years*13 constituted compensation for services rendered, or constituted the payment of dividends.

(b) The stock ownership of the individual petitioners in the Peterson Produce Company prior and subsequent to the formation of the corporate petitioner.

(c) The assets of Peterson Produce Company transferred to the corporate petitioner at the time of its formation and the extent of the functions of Peterson Produce Company contemplated to be carried on and carried on by the corporate petitioner after such transfers.

(d) The extent and value of the services rendered by petitioner Lloyd E. Peterson to Peterson Produce Company and Peterson Sales Company before and after the formation of the corporate petitioner.

(e) The amount of the accumulated earnings and profits of Peterson Produce Company, if any, transferred, or properly transferable, to the corporate petitioner at the time of its formation.

(f) The amount of the earnings and profits of the corporate petitioner available for the payment of dividends during the taxable years.