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identification of the balance of the disputed 1988 payments.
Similarly, of the remaining $3,263.51 of disputed 1989 payments,
the parties agree that the entire $3,263.51 was paid by NITCO for
utility bills with respect to the 301 North Washington Street
property that NITCO was subleasing to NICATV. All the 1989
utility bill expenses covered the period from January 1 through
June 30, 1989, when NICATV occupied the 301 North Washington
Street building.
We have previously determined that NITCO's activities with
respect to NICATV were not undertaken by NITCO with a profit
motive. Petitioners, however, contend that NITCO's payments of
the utility bills directly benefited NITCO, because NITCO also
stored certain telephone equipment in the 301 North Washington
Street building.
Mr. Mussman testified that NITCO paid these utility bills
because it had stored some of its telephone equipment in the 301
North Washington Street building that it was subleasing to
NICATV. The revenue agent, however, testified that, during his
visit to the building during the fall of 1992, he found only a
few pieces of office furniture stored there. On brief,
petitioners have tried to explain this conflict by claiming the
agent was only able to observe the space in the building to which
he was given access. More importantly, however, petitioners have
failed to adequately explain why the utility bill payments were
recorded as "open account loans" to Mr. Mussman if the payments
were, in fact, business expenses of NITCO.
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