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receive a benefit from the bookkeeping errors. Corporate
payments to third parties at the direction of shareholders, or in
discharge of the shareholders' debts and liabilities, may
constitute a constructive dividend. Tennessee Sec. Inc. v.
Commissioner, 674 F.2d 570, 573 (6th Cir. 1982), affg. T.C. Memo.
1978-434; Gardner v. Commissioner, 613 F.2d 160 (6th Cir. 1980),
affg. T.C. Memo. 1976-349; Wortham Mach. Co. v. United States,
521 F.2d 160, 164 (10th Cir. 1975); Noble v. Commissioner, 368
F.2d at 442; Sachs v. Commissioner, 277 F.2d 879, 882 (8th Cir.
1960), affg. 32 T.C. 815 (1959); Yelencsics v. Commissioner, 74
T.C. 1513, 1529 (1980); Magnon v. Commissioner, 73 T.C. 980, 997
(1980). Petitioners seek to distinguish the facts in many of the
above cases from those in the instant case on grounds that are
immaterial to the outcome. The basic issue is whether the
corporate expenditures were incurred primarily to benefit the
corporations' trade or business or primarily for the benefit of
the shareholders. Ireland v. United States, 621 F.2d 731, 735
(5th Cir. 1980); Loftin & Woodard, Inc. v. United States, 577
F.2d 1206, 1215 (5th Cir. 1978); Noble v. Commissioner, supra at
443; Magnon v. Commissioner, supra at 993-994. When a
corporation confers an economic benefit upon a shareholder in his
capacity as such, without an expectation of repayment, that
economic benefit becomes a constructive dividend, taxable to the
shareholder whether or not the corporation intended to confer a
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