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that title and ownership of the vending machines passed to
petitioners or their various corporations.9 Mr. Handel contended
that it was “always clear” that these financial institutions had
no interest in the machines other than obtaining paybacks of
loans. Mr. Handel believed that either petitioners or their
corporations would have the right to pursue a stolen vending
machine.
OPINION
The controversies here, to a great extent, focus on the
ownership of numerous water purification machines leased, sold,
and used for business purposes by petitioners’ corporations. The
questions are substantially factual and have been complicated
because of petitioners’ relationships with their numerous
interrelated corporate entities. This case is further
complicated by a myriad of transactions, including sales, sales
and lease backs, loans and security interests, and other
interrelated transactions and settlements of controversies and
lawsuits. The absence of business records (both corporate and
individual) for key periods further exacerbates the situation.
The record in this case is patchy and, in many instances, vague.
Respondent determined that petitioners were not entitled to
deduct expenses claimed on the Schedules C attached to their 1986
9 Mr. Bowden waived the attorney-client privilege so that
Mr. Handel could testify before this Court. Also, it appears
that Mr. Handel is Mr. Bowden’s son-in-law.
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