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economic benefits from the corporation without expectation of
payment therefor, Ireland v. United States, 621 F.2d at 735;
United States v. Smith, 418 F.2d 589, 593 (5th Cir. 1969), and
opinions there cited, and whether the company-provided benefits
made available to the shareholders were primarily of a personal
nature rather than in the business interests of the corporation.
Ireland v. United States, 621 F.2d at 735; Loftin and Woodard,
Inc. v. United States, 577 F.2d at 1215-1217.
The fact that certain payments are not deductible by a
corporation as business expenses, does not automatically result
in income to that corporation’s shareholder. The disallowed
expenses also must represent an economic gain or benefit to the
shareholder. See Dolese v. United States, 605 F.2d 1146, 1152
(10th Cir. 1979); Falsetti v. Commissioner, 85 T.C. 332, 356-357
(1985); Ashby v. Commissioner, 50 T.C. 409, 418 (1968). Whether
a shareholder received a constructive dividend is a question of
fact. Loftin and Woodard, Inc. v. United States, 577 F.2d at
1215. See generally, Bittker and Eustice, Federal Income
Taxation of Corporations and Shareholders, par. 8.05[8] at 8-48
(6th ed. 1994).
The disputed items we deal with in the fraud portion of the
opinion are predominantly travel expenses. Where respondent has
succeeded in establishing that the travel was by petitioner,
Betsy, and the children to a vacation resort or for a family
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