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amount of $22,000. ETCO presented the replacement check in the
amount of $22,000 to Mr. Sloan, who again forwarded the second
check to TransAmerica. The replacement check also did not clear
ETCO's bank account and was not credited to ETCO's account with
TransAmerica. On July 3, 1992, ETCO requested that Mr. Sloan
return all documents related to the ETCO pension plan. As a
result, the plan documents, the second $22,000 check, and the
original $64,000 were returned to ETCO.
Upon notice that the second check had not been credited to
ETCO's account with TransAmerica, ETCO sought out a new insurance
carrier through another insurance agent. On August 31, 1992,
upon finding a replacement insurance carrier, ETCO made a third
check in the amount of $22,000. This check was made payable to
Aetna, a separate insurance company.3
During the fiscal years in issue, ETCO paid life insurance
premiums for Edward Thorpe, Constance Thorpe, and Mr. Echols.
ETCO was also the owner and beneficiary of the life insurance
3The parties stipulate that an ETCO check made payable to
Aetna, dated Aug. 31, 1992, in the amount of $22,000, represents
an amount claimed as a deduction on ETCO's tax return for the
fiscal year ended June 30, 1990. Respondent disallowed a
deduction in the amount of $22,000 in ETCO's tax year ending June
30, 1990. It is unclear how many checks in the amount of $22,000
were issued by ETCO and how many of those checks were returned.
Because we hold that the amount was not deductible under the
facts presented, we need not decide whether the check dated Mar.
8, 1991, was the first check or when the first $22,000 check was
remitted to TransAmerica or how such a check could relate to the
check dated Aug. 31, 1992, and be deductible in the year ending
June 30, 1990.
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