George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 27

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            consolidated returns in the past and presented irrevocable                                     
            proxies and an agreement dated September 30, 1988, as evidence of                              
            an earlier separation.  INI, Inc., alleged that the agreement and                              
            proxies were backdated and therefore did not take effect until                                 
            after September 30, 1988.  This Court stated in part:  "In the                                 
            event that we were to determine that the execution of the                                      
            irrevocable proxies occurred sometime after September 30, 1988,                                
            it would then become necessary for us to determine when the                                    
            Agreement became effective and whether it was sufficient to                                    
            deconsolidate the entities."  Id.  Here we conclude that the                                   
            contemporaneous documents belie any claim that the backdated                                   
            documents memorialize the actual agreement at the earlier and                                  
            crucial date.  See Saigh v. Commissioner, 36 T.C. 395, 420                                     
                  On brief, Kolonaki argues that it has beneficial ownership                               
            of JAI stock because JAI and Kolonaki are effectively one                                      
            business unit, administered as one company with Georgiou as the                                
            head of the economic entity.  A similar argument was rejected in                               
            Ray Engineering Co. v. Commissioner, 42 T.C. 1120 (1964), affd.                                
            347 F.2d 716 (3d Cir. 1965).  In Ray Engineering Co., the                                      
            taxpayer filed consolidated returns based on operation of the two                              
            corporations as a business unit with the same executive officer                                
            who owned all of the stock in both corporations.  The Court held                               
            that there was "no common parent" within the meaning of section                                

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