J. Michael Shedd and Marita Shedd - Page 17




                                       - 17 -                                         
          Commissioner v. Riss, 374 F.2d 161, 167 (8th Cir. 1967), affg. in           
          part, revg. in part and remanding on another ground T.C. Memo.              
          1964-190.                                                                   
               Mr. Shedd testified that J&J lent the money to TLC in order            
          to create a business with which it could share costs of                     
          forwarding freight.  While this would be a valid business                   
          purpose, the Shedds have presented no documentary or                        
          corroborating evidence of any savings over the 4-year period                
          funds were advanced.  In this regard, petitioners contend that              
          requiring corroborating documentary evidence of the savings                 
          effectively increases the level of their burden of proof from a             
          preponderance to “beyond a reasonable doubt”.  Petitioners have             
          confused the level of their burden with the need to provide                 
          particulars or details of the savings.  Petitioners have merely             
          made the uncorroborated statement that there either could have              
          been or were savings.  They have not, however, explained how                
          those savings would or did occur.  Petitioners have not presented           
          sufficient documentary evidence or testimony explaining the                 
          business purpose for the advances.  It has not been shown that              
          the Shedds were acting in J&J’s business interests when funds               
          were advanced to TLC.  Instead, it appears that Mr. Shedd was               
          acting in his own best interests as sole shareholder of TLC when            
          he caused the injection of additional capital into TLC, an                  








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