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preclude the estate from recognizing income in 1940; i.e., when
the funds were deposited in the account. Id. at 266, 267.
We believe that the same analysis should apply in these
cases. In Estate of Fairbanks v. Commissioner, supra, the bank
account was established by the payor Sun Oil Co., not by either
of the joint signatories. However, we believe that the relevant
holding in that case was that the taxpayer estate did not have
the type of unfettered control which would trigger income
recognition. Petitioner here did not have exclusive control over
the funds until 1986. In fact, any action required the signature
of a vice president of the Plan’s trustee, First American, who
had a fiduciary duty to act in the Plan’s best interests, which
we believe the Plan’s trustee recognized in his dealings with the
Plan. See generally Friend v. Sanwa Bank California, 35 F.3d 466
(9th Cir. 1994); see also Winger’s Dept. Store, Inc. v.
Commissioner, 82 T.C. 869, 884 (1984). Petitioner could not
unilaterally remove the funds in the Republic Bank account. This
was a substantial restriction on petitioner’s ability to withdraw
funds, and it prevented petitioner from having constructively
received the distribution in 1985. Instead, petitioner was
taxable on the $771,000 for the 1986 tax year.
Substantial Understatement
Respondent also determined that petitioner is liable for the
addition to tax for substantial understatement of income tax in
1985 or 1986. Income tax is substantially understated if, in any
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