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rather than helpful. In view of NICATV's and NITCO's refusal to
comply with the FCC's orders in the divestiture action, the FCC
referred the matter to the Department of Justice for appropriate
enforcement proceedings. Ultimately, in July 1989, Rhys sold
NICATV.
With respect to the legal expenses for which we sustained
respondent's disallowance of business deductions by NITCO for
1988 and 1989, we sustain respondent's determination that NITCO's
payment of those legal expenses represented constructive dividend
income to Mr. Mussman for 1988 and 1989. Petitioners have failed
to establish that NITCO's payment of the expenses did not
primarily benefit the Mussman family, furthered NITCO's interest,
and was of direct and substantial benefit to NITCO. Rule 142(a).
Amount NITCO Paid to Rhys on December 20, 1988
In the notice of deficiency issued to the Mussmans,
respondent determined that $22,646, which NITCO paid to Rhys on
December 20, 1988, was constructive dividend income to Mr.
Mussman. On brief, petitioners have advanced only a vague
argument that Rhys served as a "consultant" to NITCO in 1985 and
in 1989.
Petitioners have failed to establish that the payment
furthered NITCO's interest and was of direct and substantial
benefit to NITCO. They have not offered any details or specific
information concerning what, if any, actual "consulting work"
Rhys performed for NITCO. Indeed, in NITCO and Rhys' March 24,
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