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administrator was required by the Plan to authorize any loan, we
find no such authorization during the subject years.
Furthermore, Wayne testified that he never reviewed the Plan or
supporting documents, even though he was the Plan's trustee. We
are left to conclude that petitioners rubberstamped these
transfers. This indicium supports a finding that the transfers
did not create bona fide debt.
f. Whether Repayments Have Been Made
Respondent argues that any repayment made by petitioners is
insignificant. Brian testified that in 1995 he repaid
approximately $3,000. Wayne testified that he had repaid only "a
few thousand dollars". He stated that he did not remember making
any payments or when the alleged payments had been made. We are
unpersuaded by this testimony, and neither petitioner presented
any objective evidence that any payment had been made on the
notes. This indicium supports a finding that the transfers did
not create bona fide debt.
g. Demand for Repayment
Respondent points to the fact that no demand for repayment
has been made as evidence that these transactions were not loans.
The record supports a finding that no steps were taken to enforce
the loans. Wayne was not aware of his duties as Plan trustee,
and he took no steps to collect on either his or Brian's notes.
Moreover, Wayne testified that he was not even aware of whether
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