Alfred E. Gallade - Page 20

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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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