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(2) Whether American Valmar had gross income on account of
deposits to bank accounts of its sole shareholder, Markovski.
(3) Whether American Valmar is entitled to additional
deductions for business expenses of $291,293, $104,894, and
$399,828 for 1991, 1992, and 1993, respectively.
(4) Whether American Valmar is subject to accuracy-related
penalties for 1991, 1992, and 1993.
(5) Whether American Valmar is subject to delinquency
additions for 1991, 1992, and 1993.
The issues for decision with respect to Markovski are:
(1) Whether Markovski had gross income on account of
constructive dividends of $670,547, and $1,600,000 received from
American Valmar during 1991 and 1992, respectively.
(2) Whether Markovski is subject to accuracy-related
penalties for 1991 and 1992.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
FINDINGS OF FACT
Introduction
Some of the facts have been stipulated and are so found.
The stipulations of fact filed by the parties, with accompanying
exhibits, are incorporated herein by this reference. At the time
the petitions were filed, American Valmar maintained its
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