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alien, is a U.S. person. Sec. 7701(a)(30)(A). Since Mr. Aydin
owns more than 50 percent of petitioner, he and petitioner would
be related taxpayers under section 267(b)(2). Mr. Aydin has the
burden of establishing that he is not a cash basis taxpayer,
North Am. Serv. Co. v. Commissioner, 33 T.C. 677, 696-697
(1960),5 remanded on compromise, 7 AFTR 2d 1244, 61-1 USTC par
9352 (7th Cir. 1961), cited for this point in Liflans Corp. v.
United States, 182 Ct. Cl. 825, 841, 390 F.2d 965, 974 (1968),
and he has not met that burden. Indeed, his Federal personal
income tax return for 1989 indicates that he is a cash basis
taxpayer.
Petitioner admits that the subject $168,099 was not paid
during the year in issue. Neither Mr. Aydin nor AA&H included
the subject commission in income.
Section 267(a)(2) does not allow a payor to deduct an amount
before it is included in the payee's gross income where: (a) By
reason of the payee's method of accounting, the amount is not
gross income to the payee until paid, and (b) the payor and payee
are related taxpayers within the terms of section 267(b). If
AA&H is a sole proprietorship, both these requirements would be
5The Court of Appeals for the Seventh Circuit in North
American Service Co. v. Commissioner ordered this case remanded
and disposed of in accordance with a stipulated settlement. As
this Court has previously noted, this remand does not affect the
vitality of the opinion as an expression of the Tax Court's views
on the issue involved. See Cosmopolitan Credit Corp. v.
Commissioner, T.C. Memo 1972-103 n.4.
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