Alejandrina De Aycardi - Page 7

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               As a nonresident of the Unites States, petitioner's                    
          dividend income received on the mutual fund investment is taxable           
          under section 871(a)(1)(A) and normally would be taxed on the               
          basis of the 30-percent withholding tax applicable to nonresident           
          aliens.  The dividend income that petitioner received does not              
          qualify under section 871(h) as nontaxable U.S. source interest             
          income received by a nonresident alien.                                     
               Generally, we treat facts as they happened, not how they               
          could or might have happened in the ideal situation for a                   
          taxpayer.  See Estate of Legg v. Commissioner, 40 B.T.A. 1074,              
          1076 (1939), revd. and remanded on another issue 114 F.2d 760               
          (4th Cir 1940).  In 1988 and 1989, in regard to the amounts in              
          controversy, petitioner received dividend income, not portfolio             
          debt interest income that would have been nontaxable under                  
          section 871(h).  Petitioner failed to file a Form W-8 to notify             
          the withholding agent of her nonresident alien status, and                  
          petitioner has not presented evidence that proved either that the           
          deficiency determinations were incorrect or that petitioner                 
          qualifies under section 871(h) for a tax exemption on her                   
          dividend income.                                                            
               Petitioner's argument that she relied on the mutual fund to            
          properly invest her $1,015,489 to ensure that she was not taxed             
          on any income earned on her investment is not persuasive.                   
          Reasonable reliance on an agent may constitute a possible defense           

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