Northwestern Indiana Telephone Company - Page 80

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            1988, complaint in the constitutional challenge action, they                               
            alleged that Rhys received no compensation from NITCO and had no                           
            formal responsibilities at NITCO.  We hold that the $22,646                                
            payment was constructive dividend income to Mr. Mussman in 1988.                           
            Rule 142(a).                                                                               

            "Open Account Loans"                                                                       

                  NITCO on its books recorded certain payments that it had                             
            made as "open loan account payments" to Mr. Mussman.  In the                               
            notice of deficiency issued to the Mussmans, respondent                                    
            determined that $13,814 in "open account loans" that NITCO made                            
            for 1988 and $16,792 in "open account loans" that NITCO made for                           
            1989, represented constructive dividend income to Mr. Mussman.                             
            Respondent has now conceded that certain of the 1988 and 1989                              
            payments NITCO made were not constructive dividend income to Mr.                           
            Mussman.  Petitioners, on the other hand, have conceded that                               
            certain other of the 1988 and 1989 payments NITCO made were                                
            constructive dividend income to Mr. Mussman.  Still at issue                               
            between the parties is whether the remaining $7,058.11 of 1988                             
            "open account loans" and the remaining $3,263.51 of 1989 "open                             
            account loans" were constructive dividend income to Mr. Mussman.                           
                  Of the remaining $7,058.11 in disputed 1988 payments, the                            
            parties agree that at least $6,119.95 of the payments was for                              
            utility bills with respect to the 301 North Washington Street                              
            property that NITCO was subleasing to NICATV, Rhys's cable                                 
            television company.  The parties cannot agree on the                                       



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