- 13 -
long as it actually conducted business.[4] * * *
Considering these principles and the fact that Finance engaged in
the business activity of borrowing and lending money at a profit,
it would seem that Finance should be recognized as the recipient
of interest paid to it by petitioner.
Of course, a corporate entity can act as an agent for its
sole shareholder rather than for its own account. But these
instances have been rather narrowly restricted to situations
where the corporation's role as an agent is made clear; e.g.,
where the agency relationship is set forth in a written
agreement, the corporation functions as an agent, and the
corporation is held out as an agent in all dealings with third
parties related to the transaction. Commissioner v. Bollinger,
485 U.S. 340 (1988).5 The facts before us do not fit this mold.
4See also Ross Glove Co. v. Commissioner, 60 T.C. 569, 588
(1973).
5In Bass v. Commissioner, 50 T.C. 595, 601 (1968), we
observed:
Long ago, the Supreme Court held that when a
corporation carries on business activity the fact that
the owner retains direction of its affairs down to the
minutest detail makes no difference tax-wise, observing
that "Undoubtedly the great majority of corporations
owned by sole stockholders are 'dummies' in the sense
that their policies and day-to-day activities are
determined not as decisions of the corporation but by
their owners acting individually." National Carbide
Corp. v. Commissioner, supra at 433; see Chelsea
Products, Inc., 16 T.C. 840, 851 (1951), affd. 197 F.2d
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