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transactions designed to defraud the U.S. Government and which
had been placed in secret Swiss bank accounts over which the
taxpayers exercised control. The Court of Appeals concluded that
the funds need not be included in income. The Court of Appeals
stated
even when a corporate officer is its sole shareholder
(and thus in ultimate control), and he transfers
corporate funds to his personal checking account, and
his dealings with the corporation are “extremely
informal,” there is no constructive dividend so long as
he can show that his intent “was to use such funds for
corporate purposes as an agent of the corporation.”
* * * [Id. (quoting Nasser v. United States, 257 F.
Supp. 443, 449 (N.D. Cal. 1966)).]
Petitioner contends that the following facts demonstrate
that he was acting on behalf of his corporations as an agent, to
benefit the corporations, when he withdrew corporate funds and
placed them into personal accounts: (1) He returned funds to IL
NA Tours to facilitate IL NA Tours’ meeting its obligations to
remit $62,155 per month to Northwest; (2) except for a nominal
amount, he did not use the funds for personal purposes but
instead invested them for corporate purposes; i.e., in an effort
to save his corporations by earning money with which to repay
Northwest; (3) he made personal guaranties of the corporate
debt;32 (4) he transferred funds to the ANB accounts, the control
32 Petitioner also argues in this connection that he
mortgaged personal assets in order to obtain letters of credit
(continued...)
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