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should be recharacterized, as respondent contends, or respected,
as petitioner contends.
A. Resolution of Certain Questions That
Relate to All the Transactions at Issue
1. Relationships Among the Persons
Involved in the Transactions at Issue
a. Bank Transactions
Respondent contends that petitioner controlled all of the
foreign corporations pledging collateral78 through his ownership
of the stock,79 and/or his position as a director and/or officer,
78 One of petitioner's alternative arguments relates to respon-
dent's control contention. He argues that if respondent believes
that he owned a controlling stock interest in the foreign cor-
porations pledging collateral, she should have determined that
those corporations were CFC's as defined in subpart F of the Code
and that petitioner is taxable under that subpart on the interest
received by those corporations, rather than having determined
deficiencies in the respective withholding tax liabilities of
Radcliffe and BOT. The short answer to that argument is that
respondent is free to make whatever determinations she chooses;
whether the determinations that respondent makes should be
sustained is for the Court to decide.
79 Respondent makes general and sweeping allegations on brief
regarding petitioner's stock ownership of the foreign corpora-
tions pledging collateral. She then concludes from those allega-
tions that petitioner controlled those corporations. However,
with respect to Merit, respondent seems to admit that peti-
tioner's mother controlled Merit throughout the period during the
years at issue in which Merit's deposit secured the Union Bank
$570,000 loan to BOT (viz., from January until March 1984).
With respect to Pioneer and its two wholly owned subsidiaries
Multi-Credit and Mandalay, respondent contends that during the
years at issue petitioner owned an amount of stock that, albeit
less than all of the stock of Pioneer, gave him "effective
control" of that corporation and therefore of those subsidiaries.
(continued...)
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