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otherwise reconcile the inconsistency between the percentages of
stock ownership, on the one hand, and the agreement for
allocations of percentages of net profits from trade shows to the
stockholders, on the other. The stockholders’ agreement also
contains no provision for payment of the net profits of the trade
shows allocated to the stockholders, whether by payments as
dividend distributions with respect to stock, by payments of
compensation to stockholder-officers, or in some other fashion.
In any event, petitioner has never declared a dividend. In
addition, Schedule E, Compensation of Officers, for each of
petitioner’s Forms 1120 in evidence for prior years, as well as
the taxable periods at issue, shows compensation paid to the
stockholder-officers as “None”.
From 1990 through July 31, 1996, petitioner conducted trade
shows and exhibitions primarily in the former Soviet Union5 with
Crocus, a Russian joint-stock company solely owned by Agalarov.
5The stipulation of facts states that foreign trade shows at
issue were conducted in former Soviet Bloc countries. We may
disregard stipulations between parties where justice requires if
the evidence contrary to the stipulation is substantial or the
stipulation is clearly contrary to facts disclosed by the record.
See Cal-Maine Foods, Inc. v. Commissioner, 93 T.C. 181, 195
(1989); Jasionowski v. Commissioner, 66 T.C. 312, 318 (1976).
The record discloses that all trade shows at issue in this case
were conducted in the former Soviet Union. Although trade shows
were also conducted in Romania, a former Soviet Bloc country that
was not part of the Soviet Union, the trade shows in Romania are
not at issue in this case. We therefore disregard the parties’
stipulation and find that foreign trade shows at issue in this
case were conducted in the former Soviet Union.
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