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expense does not automatically result in constructive dividends
to a shareholder. Ashby v. Commissioner, supra at 418. The
corporation must also have conferred an economic gain or benefit
on the shareholder or a member of the shareholder's family as a
result of the corporation's transfer, without expectation of
repayment. See United States v. Smith, 418 F.2d 589 (5th Cir.
1969); Falsetti v. Commissioner, 85 T.C. 332, 356-357 (1985);
Knott v. Commissioner, 67 T.C. 681, 693-694 (1977); Ellington v.
Commissioner, T.C. Memo. 1989-374, affd. 936 F.2d 572 (6th Cir.
1991). Petitioners bear the burden of proving that respondent's
determination of a constructive dividend is erroneous. Rule
142(a).
In the instant case, the question remaining is whether the
payment from the Corporation to the Committee also resulted in a
demonstrable economic benefit to Vance, such that a constructive
dividend may be imputed to the Laniers.
Respondent argues that because Vance was the only candidate
supported by the Committee, he was the only possible beneficiary
of the expenditures made by the Committee. Respondent cites
Epstein v Commissioner, 53 T.C. 459 (1969), Johnson v.
Commissioner, 74 T.C. 1316 (1980), and Hufnagle v. Commissioner,
T.C. Memo. 1986-119, in support of this position. Conversely,
petitioners argue that no economic benefit inured to Vance, as
the funds were used to satisfy the obligations of the Committee,
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