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petitioner increased his net wealth by $986,856 when he reduced
that amount to his personal dominion and control. Therefore,
respondent asserts, petitioner’s income should be increased by
$986,856 for 1988.
Petitioner contends, however, that the $986,856 is not
taxable to him because he did not withdraw those funds from the
corporate accounts for his own benefit; rather, he placed them
into his personal accounts in his capacity as an agent for IL NA
Tours and for its benefit to protect the funds from seizure by
Northwest. Petitioner maintains that he did not use the $986,856
for personal purposes, but that he used the funds to benefit IL
NA Tours, including transferring funds from his personal accounts
to the ANB accounts which were used first to negotiate a
settlement with Northwest in order for IL NA Tours to remain in
business and then to pay corporate debts owed Northwest.
Petitioner relies on Stone v. Commissioner, 865 F.2d 342,
343 (D.C. Cir. 1989), revg. and remanding Rosenbaum v.
Commissioner, T.C. Memo. 1983-113, in support of his agency
theory. In Stone, the Commissioner determined that the
taxpayers, a corporate officer (who also was a shareholder in the
corporation) and the corporation’s attorney (who also served as
one of its directors), had to include in income $4 million of
corporate funds which had been derived from a series of
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