- 30 -
a plan is not created simply by adding together the number of
sites considered. See id. at 277.
Petitioner’s corporate minutes document discussions of the
possibility of opening stores in McKinney or Bonham, but no
specific action was taken by the board because the available
properties were not suitable. We realize that not all of the
actions and decisions of the board of directors are documented in
the corporate minutes, and we have considered the testimony of
the corporate officers and petitioner’s realtor.
Based on the facts and circumstances, we agree with
respondent. Petitioner had an intent to expand its business and
seriously investigated the possible expansion into McKinney or
Bonham by considering specific properties. However, no specific,
definite, and feasible business expansion plan materialized from
the research. We conclude that petitioner had neither developed
a business expansion plan that was definite, specific, and
feasible nor taken a substantial step to implement a business
expansion plan.
Respondent has met his burden of proof in demonstrating that
petitioner did not have a specific, definite, and feasible
business expansion plan during the years in issue and that it was
not reasonable for petitioner to accumulate its earnings and
profits for this purpose.
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