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(5) Petitioner’s Misleading Explanations
Petitioner claims that he was merely acting as Betsy’s agent
in her administration and oversight of the Sley Corporations and
that Betsy gave petitioner instructions on how to carry out his
duties. The extension of petitioner’s argument then, is that
petitioner cannot be held responsible for any income that may
have been omitted from petitioner’s and Betsy’s joint tax return
because petitioner was merely acting under Betsy’s control and
direction. This claim is squarely contradicted by the record.
We are not concerned with whether petitioner was Betsy’s
agent in the sense that Betsy is bound by, or liable for,
petitioner’s actions. Our concern is as to petitioner’s
liability for his own actions. It was petitioner, not Betsy, who
hired and supervised Baybrook. It was petitioner, not Betsy, who
directed Baybrook as to Markette’s payment of American Express
invoices, knowing that those invoices included numerous charges
for petitioner’s and Betsy’s personal benefits. It was
petitioner, not Betsy, who brought Berger into the picture and
who understood that Berger’s limited engagement meant that (in
the words of the accountants’ compilation reports that
accompanied the Sley Corporations financial statements) Berger
would merely present “information that is the representation of
management”. Petitioner, thus, made and effectuated the
decisions that led to the omission of constructive dividend
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