- 43 - From 1980 through 1989, NITCO maintained no written records documenting its specific future business needs and plans. From 1954 through 1994, NITCO did not declare and pay any formal dividends to its shareholders. L. Examinations Conducted of Petitioners' Returns, Notices of Deficiency, NITCO's Petition, and Subsequent Formal Discovery Conducted by Respondent in the Instant Cases On or about August 3, 1990, a revenue agent contacted and apprised Mr. Mussman and NITCO that the agent would be conducting an examination. In an Information Document Request dated October 31, 1990, to NITCO, the revenue agent, among other things, asked NITCO to elaborate with respect to its plans concerning the use of its accumulated earnings. The agent's request, in pertinent part, stated: 1. During my first visit, you enumerated the following potential uses of the company's retained earnings: At the present time, the Company is involved in expansion: (1) The Company has a plan to introduce fiberoptics to its system. Engineering estimates have not been made for the system. (2) The Company is developing a cellular telephone capability for the area. This area is a RSA, Rural Statistical Area. This development is being shared with two other companies, Monan and Pulaski-White. However, the family members, not the Company, made the investment. (3) The Company would like to acquire the Monan telephone exchange. There have been negotiations but nothing has been put in writing about this. The Company is closely held. As a result, there are noPage: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Next
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