George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 35

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            between a corporation and its sole shareholder.  That the                                      
            shareholder, in effect, has the sole authority to enforce the                                  
            debt against himself certainly raises questions about the                                      
            substantive significance of formal debt instruments and book                                   
            entries.  Saigh v. Commissioner, supra at 420.                                                 
                  The record herein contains little or no reliable evidence in                             
            support of Georgiou's position.  Kolonaki classified the advances                              
            as loans on its books and records, and Georgiou made a small                                   
            repayment during the years in issue.  These factors are                                        
            outweighed by the absence of credible documents that would                                     
            substantiate Georgiou's intent to repay the advances at the time                               
            the advances were made.  The backdated documents that reflect a                                
            security agreement, maturity date, and an interest rate for the                                
            advances are not reliable.  The ceiling on the advances and the                                
            right to enforce the obligations are illusory because Georgiou,                                
            himself, controlled these decisions.                                                           
                  Noticeably absent are promissory notes.  A taxpayer's                                    
            execution and delivery to the corporation of promissory notes or                               
            other debt instruments in connection with, and in close temporal                               
            proximity to, the corporate disbursements is evidence that they                                
            are loans.  See Baird v. Commissioner, T.C. Memo. 1982-220.  No                                
            promissory notes were executed for the advances from the Loan to                               
            Shareholder account from 1980 through the years in issue.                                      
                  After considering the factors that distinguish loans from                                
            dividends, we conclude that Georgiou has failed to satisfy his                                 

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