Richard R. Hamlett - Page 15

                                       - 15 -                                         
               Fifthly, the lack of evidence--or even clear assertions--as            
          to what petitioner did in 1996 with regard to a supposedly then-            
          fixed obligation, combined with petitioner’s delay until 2000 in            
          acknowledging an obligation, combined with petitioner’s failure             
          through September 25, 2003, to repay any significant part (or               
          perhaps any part at all) of the $100,000, cause us to conclude,             
          and we have found, that it is more likely than not that (1)                 
          petitioner did not recognize in 1996 an existing and fixed                  
          obligation to repay the $100,000, and (2) petitioner did not make           
          in 1996 provisions to repay the $100,000.                                   
               3.  Loan                                                               
               Petitioner urges us to apply the substance over form                   
          doctrine and, on answering brief, refers to “the $100,000 Jane              
          Parker loaned Petitioner in 1996.”  We have stated that                     
               it is the substance of a transaction rather than mere form             
               which should determine the resultant tax consequences when             
               the form does not coincide with economic reality.                      
               Commissioner v. Court Holding Co., 324 U.S. 331 (1945);                
               Higgins v. Smith, 308 U.S. 473 (1940); Foster v.                       
               Commissioner, 80 T.C. 34, 201 (1983)[affd. in part and                 
               vacated in part 756 F.2d 1430 (9th Cir. 1985)]; Gray v.                
               Commissioner, 56 T.C. 1032 (1971).  The taxpayer, as well as           
               the Commissioner, is entitled to assert the substance-over-            
               form argument although in such situations taxpayers may face           
               a higher than usual burden of proof. * * * [Glacier State              
               Electric Supply Co. v. Commissioner, 80 T.C. 1047, 1053                
               (1983).]                                                               
               It is not clear whether petitioner’s “loan” contention is              
          intended to be (1) an alternative or (2) merely an attempt to               








Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011