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Commissioner, 406 F.2d 706, 710 (5th Cir. 1969) (the term "books
of account" as used in section 7605(b) is limited to the
taxpayer's books and records), affg. 50 T.C. 186 (1968); Geurkink
v. United States, 354 F.2d 629, 631 (7th Cir. 1965) (same);
Estate of Adams v. Commissioner, T.C. Memo. 1967-221 (same), and
the cases cited therein.
Nor does the record support petitioner's proposed finding
that the Commissioner needed its 1993 board resolutions to learn
that Mr. Ashare had made a large loan to petitioner during 1993,
or, more importantly, to determine that petitioner could not
deduct the amount of compensation reportedly paid to Mr. Ashare
during that year. Before commencing his examination of
petitioner's 1993 taxable year, respondent had petitioner's 1993
corporate income tax return, which stated explicitly that: (1)
Petitioner was deducting $1,750,000 in compensation paid to its
sole shareholder, Mr. Ashare, (2) the $1,750,000 deduction was
generating a $1,857,933 taxable loss for 1993, (3) petitioner
owed Mr. Ashare $916,756 on December 31, 1993, and that he had
lent at least $907,956 of that amount to petitioner during 1993,
(4) petitioner had a reported retained earnings deficit of
$89,855 at December 31, 1993, and (5) petitioner had liquidated
most of its assets in 1993. Respondent also was privy to the
fact that petitioner had used almost all of its 1993 reported
loss to claim a $581,812 refund for taxes paid for 1990 and that,
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