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the years in issue, NITCO had actual plans concerning many of the
purported business needs petitioners have alleged. NITCO
produced practically nothing in terms of documents that were
prepared during the years in issue that reflect its alleged plans
and future needs. Indeed, we view these claimed future needs to
be largely afterthoughts advanced by petitioners to avoid the
imposition of accumulated earnings tax liability against NITCO.
Moreover, almost all the asserted future needs are too vague and
uncertain to be considered reasonably anticipated business needs
of NITCO.
Additionally, considerably undercutting petitioners'
position that NITCO's earnings were accumulated to meet these
alleged reasonably anticipated business needs of NITCO, is the
fact that, notwithstanding these alleged future needs, NITCO, in
late 1990 and early 1991, loaned approximately $3.6 million to
BMCT, a corporation solely owned by Mr. Mussman's son Kyle, to
enable BMCT to acquire a Washington State cellular telephone
business. The $3.6 million loaned was an investment unrelated to
NITCO's business and was of dubious economic benefit to NITCO,
considering NITCO's later agreement to subordinate its rights
with respect to BMCT's repayment of the loan in order for BMCT to
borrow an additional $2.8 million from another lender. Although
NITCO subsequently converted its $3.6 million loan to a limited
partnership interest in the BMCT limited partnership, pursuant to
the advice of its attorneys following the issuances of the
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