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beneficial ownership, we held he received constructive dividends
and was required to include those dividends in his gross income.
Petitioners do not dispute Mr. Cordes’s complete control
over all aspects of the corporations in the taxable years before
us; in fact, petitioners rely on that control as the reason why
the record owners should not be held to have received
constructive dividends. Petitioners acknowledge that in the
taxable years before us, Mr. Cordes exercised complete control
over CFC and ECI and made all the decisions as to amounts,
timing, and character of the distributions here at issue. All
decisions typically made by shareholders were instead made by Mr.
Cordes, and the record owners knew that. The parties concede
that, regardless of record ownership, Mr. Cordes had the power to
change ownership of those shares as he wished. Petitioners even
stated in their opening brief that “The nominal owners are Eddy
Ben Cordes, John J. Cordes, and Jean Ann Richard for the years
1994 and 1995. It is clear however that these persons own [these
corporations] in form only. The true control of [these
corporations] is in Edmund J. Cordes.”
It is abundantly clear that Mr. Cordes was CFC’s and ECI’s
beneficial owner during the taxable years before us. We must now
consider whether ECI and CFC conferred economic benefits on the
petitioner-shareholder, Mr. Cordes, as beneficial owner, without
expectation of repayment. See Dolese v. United States, supra at
1152 (citing Palo Alto Town & Country Vill., Inc. v.
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