Steven K. Han - Page 62





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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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