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examination. In that year, petitioner paid refunds of $46,165
from the Sanwa account. Overall, petitioner withdrew $257,129
from the Sanwa account during 1991.
Petitioner also had a term savings account at World Savings
and Loan Association (World Savings). He opened the account on
July 23, 1990, with a $50,000 deposit. The savings account was
in petitioner’s name and was not designated a trust account.
After making the initial $50,000 deposit in 1990, petitioner did
not deposit any additional money into the World Savings account.
In particular, he did not deposit any of the tuition from the
summer 1991 or winter 1992 guaranteed review courses into the
account. Petitioner deposited the tuition paid during 1991 into
the Sanwa account and did not transfer any money between the two
accounts.
Petitioner maintained the account at World Savings until
1994. Throughout the term of the account, petitioner never made
any withdrawals from it. He did not pay any refunds to
guaranteed students who failed the bar examination from the World
Savings account. Nor did petitioner withdraw money from the
account when guaranteed students passed the bar examination.
Petitioner allowed the interest earned on the account to
accumulate and did not pay the interest over to the guaranteed
students. Petitioners reported the interest income from the
account on their 1991 tax returns.
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