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audit began. Burden relied solely on the prior returns, prepared
by petitioner, in arriving at the beginning loans from
stockholders entry he used in preparing the amended returns. No
other documentation, such as promissory notes or repayment
schedules, was available to verify the existence of such loans.
Petitioner, with prior experience in the finance industry,
understood the importance of documenting loans, if indeed loans
existed. Attempts by petitioner to characterize retroactively
the payments he received as loan repayments are not credible.
See Noble v. Commissioner, 368 F.2d 439 (9th Cir. 1966), affg.
T.C. Memo. 1965-84.
We conclude, therefore, that the payments from FBI to
petitioner were not loan repayments. See Reis v. Commissioner,
T.C. Memo. 1995-231; Cordes v. Commissioner, T.C. Memo. 1994-377.
Pursuant to the parties' stipulation, the payments for the
personal benefit of petitioner are constructive dividends.
Payments for the Benefit of Mathers, Jr.
"The power to dispose of income is the equivalent of
ownership of it. The exercise of that power to procure the
payment of income to another is the enjoyment, and hence the
realization, of the income by him who exercises it." Helvering
v. Horst, 311 U.S. 112, 118 (1940). The assignment of income
principle has been extended to situations such as this instance
where one with a controlling interest in the corporation has the
power to direct corporate funds to another. See Green v. United
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