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offered no evidence showing that either a benefit accrued to CFC
or a benefit did not accrue personally. We therefore hold that
Mr. Cordes received constructive dividends with respect to the
amounts CFC paid to him as interest on the three loans, to the
extent the amounts of those payments exceed the amounts allocated
as interest income in accordance with our holding supra. We
sustain respondent’s determination with regard to this issue.
C. Fraud Penalty Against CFC
Respondent determined CFC was liable for a civil fraud
penalty in the amount of $9,773 for 1991, pursuant to section
6663. Respondent based his determination on CFC’s understatement
of income attributable to $35,349 from late fees received. CFC
filed an amended return for 1991 reflecting CFC’s receipt of this
income. The parties stipulated that this issue of whether CFC is
liable for the civil fraud penalty for 1991 would be resolved on
the same basis as that in the final decision in Cordes Fin. Corp.
v. Commissioner, T.C. Memo. 1997-162, affd. without published
opinion 162 F.3d 1172 (10th Cir. 1998). In Cordes Fin. Corp., we
sustained respondent’s determination of fraud for the 1990
taxable year because Mr. Cordes, as CFC’s president, schemed to
divert and disguise the diverted income. CFC appealed our
decision to the Court of Appeals for the Tenth Circuit. However,
as the Court of Appeals stated in note 1 to its unpublished
opinion, CFC did not dispute our holding as to the fraud penalty
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