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charged travel and entertainment expenses on these credit cards,
as detailed infra.
Since the 1960’s, Betsy has held credit cards issued in the
name of one or another of the Sley Corporations. Harry
originally gave these credit cards to Betsy. Betsy had used the
credit cards, both before and during the years in issue, without
regard to whether the charges made had a business purpose. Betsy
understood that, as a result, Markette would be paying for the
amounts she charged, and that she and petitioner would not be
paying for these amounts. Petitioner used his Markette American
Express credit card only once after 1986.
When Betsy took a trip without petitioner, she informed him
of the trip.
1983
Table 5 lists certain checks written on the Markette account
in 1983. The table shows the date the check was written, check
number, payee, and amount. All of these checks were signed by
petitioner. Respondent determined that petitioner and Betsy
failed to report $18,611.70 of constructive dividends received
from Markette in 1983, the sum of the checks listed in table 5,
$15,299.88, plus the amount of a $3,311.82 debit memorandum
resulting from a transfer of funds to Media Communications, Inc.9
9 Respondent’s travel and entertainment expense
determinations in the notices of deficiency are based on amounts
of certain Markette checks. It is apparent to us that, in
general, our redetermination should be based on evaluations of
the specific trips or the occasions of the specific entertainment
(continued...)
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