George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 31

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                  Georgiou relies most heavily upon the books and records of                               
            Kolonaki and upon purported loan repayments as evidence of his                                 
            intention to repay the advances.  Georgiou refers to two                                       
            documents to support his position:  The Security Agreement, dated                              
            1980, which gave Kolonaki a present security interest in                                       
            Georgiou's personal assets, and the Consent by Directors                                       
            document, dated 1988, which established a maturity date and                                    
            interest rate for the advances.                                                                
                  Prior to the creation of the Consent by Directors document,                              
            there was no interest rate and no interest accrued on the                                      
            advances.  Both of these documents, however, were created in 1991                              
            and backdated.  This Court's analysis in Saigh v. Commissioner,                                
            36 T.C. at 420, provides an appropriate response to Georgiou's                                 
                         [Taxpayers] argue that actions taken subsequent to                                
                  the date of transfer, when combined with the original                                    
                  event, clearly establish the real intention of the                                       
                  parties.  They rely upon the confirmation of the loan                                    
                  by the directors of Building Inc. and Investment and                                     
                  the execution and acceptance of the note.  This action                                   
                  was not undertaken until 2 months after the transaction                                  
                  in issue occurred.  No explanation is given of why                                       
                  nothing was done or said at the July 25, 1946, meeting.                                  
                  While the confirmation and note would ordinarily be                                      
                  some evidence, other facts present in the record                                         
                  destroy their probative value.  The actions taken were                                   
                  tardy, and undertaken only after reflection and a shift                                  
                  in opinion.  [Taxpayers] would overlook the                                              
                  interlocking control between Investment and Building                                     
                  Inc.  What was done was not the act of independent                                       
                  directors, i.e., it was not the result of bargaining                                     
                  between parties, each looking after his own self                                         
                  interest.  Saigh acted on both sides and, indeed,                                        

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