Midwest Stainless, Inc. and Robert A. and Mary J. Lechner - Page 18

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            made by Mr. Noble, the accountant for Stainless and Mr. Lechner,                           
            “consistent with Mr. Noble’s handling of similar items in his                              
            practice for the last thirty (30) years and was consistent with                            
            standard and accepted accounting practice”.  Mr. Lechner disputes                          
            the irrevocability of the reduction of the receivable, relying on                          
            Mr. Noble’s testimony that if the Court upholds Mr. Lechner’s                              
            position, the debt will be restored on the corporate books by an                           
            adjusting entry.                                                                           
                  We have concluded that Mr. Lechner’s state of mind, whatever                         
            it may been, is not determinative.  A case such as this should be                          
            decided by recourse to objective facts and circumstances, see                              
            Dean v. Commissioner, 57 T.C. 32, 43-44 (1971), with due regard                            
            for the desirability of consistency in the dealings between                                
            shareholders and the closely held corporations that they control.                          
                  We are not persuaded by Mr. Noble’s testimony--that the                              
            receivable will be adjusted upward if the Court upholds                                    
            Mr. Lechner’s position--that the reduction of the receivable on                            
            the corporate books was not a corporate dividend distribution to                           
            Mr. Lechner.  Mr Noble’s testimony flies in the face of the                                
            parties’ stipulation that the book entry reducing the receivable                           
            reduced the debt.7                                                                         

            7 Petitioners’ offer, embodied in Mr. Noble’s testimony,                                   
            which petitioners adopted on brief, seems counterintuitive.  One                           
            would think that if the Court were to hold that the debt                                   

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