John B. Mathers, Sr. - Page 9

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          States, 460 F.2d 412, 419 (5th Cir. 1972); Sammons v. United                
          States, 433 F.2d 728, 730 (5th Cir. 1970).  To determine whether            
          petitioner should be taxed on the receipt of FBI funds by                   
          Mathers, Jr., we take into account "whether the taxpayer has                
          exercised substantial influence over the corporate action whose             
          tax consequences are at issue."  Green v. United States, supra at           
               Petitioner, as president and 97-percent shareholder in FBI,            
          had the power to control the distribution of FBI funds.                     
          Petitioner admitted that he had control over the FBI checking               
          account.  Petitioner possessed the power to require Mathers, Jr.            
          to stop writing personal expense checks on the FBI account.                 
          Petitioner chose not to use this power.  Instead, petitioner                
          furnished Mathers, Jr. with complete access to FBI funds and                
          knowingly permitted Mathers, Jr.'s use of those funds for his               
          personal expenses.                                                          
               The facts of this case are similar to the situation                    
          presented in Nicholls, North, Buse Co. v. Commissioner, 56 T.C.             
          1225 (1971).  In that case, the taxpayer was president and 50-              
          percent shareholder in a corporation.  The taxpayer played a very           
          important role in the corporation's acquisition of a boat.                  
          His sons, with his knowledge, frequently used the boat for                  
          nonbusiness purposes.  The Court found that the taxpayer received           
          a constructive dividend from the use of the boat by his sons,               
          because he "was in complete control of the events".  Id. at 1240.           

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