- 49 -
Commissioner, 42 T.C. 358, 382-383 (1964), affd. 355 F.2d 929
(6th Cir. 1966); Ace Tool & Eng., Inc. v. Commissioner, 22 T.C.
833, 843 (1954). Where there are a number of shareholders, all
of whom are parties to the fraud, their fraudulent intent is
attributed to the corporation. Ace Tool & Eng., Inc. v.
Commissioner, 22 T.C. at 843. Similarly, the fraud of a sole or
dominant shareholder can be attributed to the corporation. Benes
v. Commissioner, 42 T.C. at 383; Auerbach Shoe Co. v.
Commissioner, 21 T.C. 191, 194 (1953), affd. 216 F.2d 693, 697-
698 (1st Cir. 1954). Corporate fraud exists if an agent commits
fraud and the corporation is the agent’s alter ego, or the agent
is acting on behalf of the corporation such that the corporation
actually benefits from the fraudulent acts. Ruidoso Racing
Association, Inc. v. Commissioner, 476 F.2d 502, 506 (10th Cir.
1973), affg. on this issue T.C. Memo. 1971-194; see Federbush v.
Commissioner, 34 T.C. 740, 749-751 (1960), affd. 325 F.2d 1 (2d
Cir. 1963).
We have found, pursuant to the parties’ stipulation, that at
all pertinent times Gleave was Kenmore’s president and sole
owner.
(a) Criminal Activity
Both Kenmore and Gleave pleaded guilty to embezzlement and
theft of gasoline on various occasions between July 1981 and
January 1982. During the years in issue, Kenmore operated a
retail gasoline station. Kenmore’s embezzlement and theft of
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