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repayment, truly placing the shareholder’s money at risk.” Id.
at 933. But, with a controlled entity, “it may be unclear
whether the shareholder or the corporation is placed at risk.”
Id. In such a case, the taxpayer must overcome a “a heavy
burden” and demonstrate that the loans were bona fide and had
“economic impact”. Id.
Petitioners attempt to overcome this heavy burden and cite
several factors which suggest that Mr. Oren would be required to
make repayment to Dart in all events. Petitioners claim that a
default on the part of Dart, HL, or HS on the various loan
obligations could have triggered a chain reaction that would have
forced Mr. Oren to pay Dart out of his own assets. We cannot
agree.
Dart was a financially stable and expanding company.
Petitioners presented no evidence that would lead us to believe
that Dart would have been unable to repay its loan obligations to
HL and HS. The same is true of HL and HS. Both companies were
financially viable and expanding. Further, given Mr. Oren’s
multicompany structure, HL’s and HS’s assets did not face the
same risks that were associated with the carrier companies, Dart
and Fleetline. We can conclude that a default on the notes by
any of the Dart companies was highly unlikely. In any event, it
is highly improbable that Dart would have made demand on Mr. Oren
to repay his loans from Dart. Any demand on Mr. Oren would
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