Jerry L. Crabtree - Page 29




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             depends on the facts of each case.  See Hardin v. United                 
             States, 461 F.2d 865, 872 (5th Cir. 1972).                               
                  In these cases, respondent argues that, as the sole                 
             and controlling shareholders of Crabtree Investments,                    
             petitioners “exercised the requisite substantial influence               
             to be taxable on these amounts.”  Petitioners’ only                      
             argument is that they could not have received constructive               
             dividends from Crabtree Investments because the corporation              
             did not receive the unreported income determined by                      
             respondent.                                                              
                  As discussed earlier in this opinion, we find that                  
             Crabtree Investments received unreported income during                   
             1992, 1993, and 1994 in the amounts determined by                        
             respondent.  Thus, we reject the sole argument that                      
             Ms. Jerry Crabtree and Mr. Eddie Crabtree did not receive                
             constructive dividends from Crabtree Investments because                 
             the corporation had not received any unreported income.                  
             Accordingly, we sustain respondent’s determination that                  
             Ms. Jerry Crabtree and Mr. Eddie Crabtree received                       
             dividends in the amounts set forth in the subject notices                
             of deficiency.                                                           











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