John B. Mathers, Sr. - Page 8

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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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