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TCM’s unreported income for 1987 described above is taxable as a
constructive dividend to petitioner, and that petitioner is
liable for tax on his distributive share of TCM’s income for 1988
from checks (a) payable to TCM but deposited in petitioner’s
personal checking account, the Double D account, or cashed
without being deposited, and (b) payable to Camaro instead of
TCM.
Petitioners contend that Camaro earned the money it received
from NSA.
2. Whether Camaro Earned the Money It Received
Petitioners contend that Camaro was essential to NSA because
Camaro could take title to the Shinwas and resell them to NSA and
Chrysler. Petitioners also contend that Camaro could provide
essential services such as financing to meet Chrysler’s needs as
its needs for Shinwas grew. We disagree; Camaro could not and
did not take title to or provide financing for $30 million worth
of Shinwas annually.
Petitioners contend Camaro was essential to the Shinwa
transaction because it had an export license which was needed to
ship the Shinwas to Chrysler in the United States. However,
there is no evidence that Camaro had an export license or that
Camaro shipped the Shinwas.
Petitioner did not tell Taylor about the NSA/Camaro
contract. Taylor was the TCM employee who handled Chrysler’s
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