- 76 - the sale of Northwest’s ticket stock that were owed to Northwest. We find that in 1988 the accounts in effect served to secure Northwest’s rights against petitioner and his corporations, and in 1991 a substantial portion of the accounts was in fact paid in settlement of Northwest’s claims asserted against petitioner and his corporations. Consequently, by yearend 1988 the funds in the ANB accounts and the Sam Han account were being held under court supervision to satisfy liabilities that were as much petitioner’s corporations’ as petitioner’s. In these circumstances, we conclude that the funds in the ANB accounts and the Sam Han account by yearend 1988 had been repaid or returned to petitioner’s corporations in that year and accordingly are not taxable to petitioner under Leaf and like cases applying the exception to the claim of right doctrine. We base our conclusion that these funds had been returned to the corporations for purposes of this exception on several factors. First, petitioner no longer had dominion and control over the funds once they were subject to the TRO. Although respondent argues that petitioner’s attorney’s role as custodian of the ANB accounts demonstrates petitioner’s maintenance of dominion and control, the facts do not support this characterization. The disbursements for petitioner’s personal expenses were made only with Northwest’s approval. Further, Northwest’s attorneyPage: Previous 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 Next
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