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to consider whether Mr. Cordes received constructive dividends as
a shareholder for those taxable years, as he is not a party to
those years herein.
The Cordeses filed jointly for 1992 and 1993, and, in docket
No. 4182-96, respondent determined they were jointly liable for
tax on the receipt of constructive dividends for those taxable
years. In that docket, we must consider whether CFC conferred an
economic benefit on petitioner-shareholder, Mr. Cordes, as
beneficial owner. See Dolese v. United States, 605 F.2d at 1152
(citing Palo Alto Town & Country Vill., Inc. v. Commissioner, 565
F.2d 1388 (9th Cir. 1977), affg. T.C. Memo. 1973-223). In order
for a company-provided benefit to be treated as income to the
shareholder, the item “must primarily benefit taxpayer’s personal
interests as opposed to the business interests of the
corporation.” Ireland v. United States, 621 F.2d at 735; accord
Dolese v. United States, supra at 1152.
Petitioners bear the burden of proving that the amounts at
issue were not expended for personal benefit or in discharge of
personal obligations. Rule 142(a); Welch v. Helvering, 290 U.S.
111 (1933); Challenge Manufacturing Co. v. Commissioner, 37 T.C.
650, 663 (1962); Arnold v. Commissioner, T.C. Memo. 1994-97. Our
standard, in reviewing these many expenditures, is whether the
expenditures primarily benefited CFC or Mr. Cordes. Frazier v.
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