-4-
for Delivery through 1989. All such returns for periods bearing on
this case were executed by one or the other of petitioners in their
capacities as corporate officers.
Delivery was a union company. After a bout of trouble with
the Teamsters, Delivery was phased out in favor of a new nonunion
company named Land Air Express, Inc. (all the stock of which is
owned by petitioners), which today operates the business formerly
conducted by Delivery.
Delivery underwent a reorganization in 1990 and filed its
corporate income tax return for that year under its new name, KTM,
Inc.
Shareholder Loan Accounts
From time to time, commencing at dates prior to 1976,
petitioner made withdrawals from Delivery. Some of the withdrawals
were recorded as shareholder loans, advances, or investments. None
was included in petitioners' income. In 1979, Delivery's
stockholders adopted a resolution ratifying all existing loans,
advances, and investments and authorized the corporation to
continue such transactions. As part of the resolution, petitioner
agreed to repay the amounts on demand.
In 1982, petitioner sold his interest in a waste management
company for $800,000. He did not use any of the proceeds to repay
his withdrawals from Delivery.
In September 1984, petitioner was advised by his accountant,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011