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Pacific account were from Eastimpex, drawn on an Eastimpex bank
account.
Funds in the First Pacific account were used to satisfy
personal obligations of Lily under the 1986 Agreement. In
addition, the two-tier payment system ended in 1990, the same
year that the required payments under the 1986 Agreement were
completed. One of the payments under the 1986 Agreement was made
with a check drawn on the First Pacific account in the amount of
$166,687 payable to Daniel Chen. In addition, another payment
due under the 1986 Agreement corresponds to a $314,912
distribution from the First Pacific account to Lily in October
1988. The timing and amount of the withdrawal correspond to the
timing and amount due to the Wan Yang Chen family under the 1986
Agreement. None of the money in the First Pacific account was
withdrawn for business purposes of Shin.
In 1984, petitioner husband and Lily opened an interest-
bearing account at Standard Chartered Bank (Standard Chartered)
in London with approximately $1.5 million from the sale of real
estate located in Canada. Based on their proprietary interest in
the real estate, the interest from the Standard Chartered account
was attributable 49 percent to petitioner husband and 51 percent
to Lily. In 1989, petitioner husband transferred his share of
the account to the United States. Individual petitioners failed
to report any of the interest income from the Standard Chartered
account in 1987 and 1988. The parties settled the amount of
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