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Bank. Nowhere in the service agreement is Guardian Services
granted the authority to act in the name of or for the account
of, or to bind by its actions, Guardian Bank.
Petitioners' 1990 joint Federal income tax return indicates
no agency relationship between Guardian Bank and Guardian
Services.
With regard to Stanford Financial, the evidence does not
indicate that Stanford Financial ever acted specifically in the
name of or for the account of Guardian Bank, nor that it ever
bound Guardian Bank by its actions.
Stanford Financial performed services for Guardian Bank of
an administrative and management nature.
The alleged service agreement between Guardian Bank and
Stanford Financial is insufficient to establish the existence of
an agency relationship between Guardian Bank and Stanford
Financial.
Based on our analysis of the evidence before us, we conclude
that neither Guardian Services nor Stanford Financial is properly
to be regarded as an agent of Guardian Bank; rather they are to
be regarded as separate entities. Accordingly, their separate
deficits in earnings and profits are not to be treated as
expenses or losses of Guardian Bank.
Addition to Tax and Accuracy-Related Penalty
Section 6651(a)(1) imposes an addition to tax for taxpayers'
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