- 13 -
position is supported by Turner's failure to mention in his
memorandum the timing requirement of section 337, that a
liquidation plan must be adopted on or before the sale date of
the assets. See sec. 1.337-2, Income Tax Regs. Petitioner
presented no evidence that its shareholders were aware of the
timing requirement. The shareholders' lack of knowledge of the
time requirement negates an indication that they intended to act
in conformity therewith. Briggs testified that he did not know
anything about liquidations prior to the sale. Hess testified at
trial that he was not ACT's tax adviser and did not provide ACT
with tax advice on the day of the sale or at any other time.
Respondent's position that ACT's decision to liquidate was
postponed until after the sale is supported by Daniell. Daniell
informed the IRS during the November 1990 interview that, after
receiving Turner's memorandum in Colorado, he, Morris, and Briggs
left the decision to liquidate "up in the air" and that they
planned to resolve the liquidation issue at a later date.
The shareholders' actions subsequent to the sale also fail
to establish that the shareholders adopted an informal
liquidation plan prior to or on the sale date to JSL. Respondent
points to the liquidation minutes that Gay had Hess prepare on
December 28, 1988. The minutes stated that the ACT shareholders
had voted to liquidate ACT on December 28, 1988, which was
2 months after the sale to JSL. Although these minutes were not
submitted to the IRS, respondent argues, and we agree, that this
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011