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June 24, 1988.52 The $8,412 in dividends recorded in the P-B No.
2 account was paid during March 1988, before any amounts in that
account were transferred to a custodial account. Moreover, there
is no evidence that any portion of this dividend income was paid
over to a custodial account.
We turn to the remaining dividend income for which
respondent bears the burden of proof. Stocks in the Sam Han
account earned dividends totaling $16,905 throughout 1988.
Although petitioner had dominion and control over the account at
least until Northwest’s auditors discovered it in early September
1988 (which resulted in the TRO’s being amended to specifically
cover it), a substantial portion of the contents of the account
was made subject to custodial control before yearend 1988;
specifically, $80,000 was transferred from the Sam Han account to
ANB No. 3 on July 18, 1988, and the remaining contents in the Sam
Han account at yearend 1988, after it had been made subject to
the TRO, equaled $137,128. In these circumstances, we conclude
that respondent has failed to show that the dividends earned in
the Sam Han account were not transferred to custodial control
before yearend 1988. We accordingly hold that petitioner is not
52 Although petitioner transferred $4,500 from his FCIS
account to IL NA Tours’ Albank No. 1 account on the same day the
FCIS account received the $4,500 dividend, respondent effectively
reduced his deficiency assertion by that amount when he treated
this $4,500 as a return of funds to IL NA Tours.
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