- 16 - this label does not reflect the true nature of these transfers. For purposes of section 6501(e)(1)(A)(ii), we hold that the NPI returns failed to adequately disclose the nature and amounts of these transfers. 2. Rental Income The Bensons also argue that the returns of NPI disclose the rents received by NPI, and that the Bensons’ constructive dividends related to the Lowell and Stanford plants were adequately disclosed on their returns. Respondent contends that the disclosures of gross rental income reported on the returns of NPI did not give respondent a clue as to the nature and amounts of these payments that we found to be constructive dividends. We agree with respondent. The returns of NPI reported gross rental income from “MFG Facilities”; however, these returns do not specifically identify the properties that generated the rental income. The Stanford and Lowell plants were identified only in NPI’s depreciation schedules. With respect to the Lowell plant, in our prior opinion we stated: ERG had no contractual obligation to pay Aker’s rent obligations. Indeed, it was, as the arbitrators concluded, Aker’s responsibility to pay NPI for the use of the Lowell plant, which Glendon ultimately paid by virtue of the final arbitration decision. This, of course, is in accord with what the brothers agreed in the unbundling agreement. Given that these funds were transferred to NPI, which the Bensons used for their personal benefit * * * we find and hold that the Bensons received constructive dividends in the amountsPage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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