- 2 - Background Pursuant to the Court’s Order issued under Rule 37(c)1 on January 23, 2003, all of the affirmative allegations in paragraph 2 of the answer, and consequently all of the facts on which respondent relies in respondent’s motion, are deemed admitted. Petitioner had a mailing address in Glenview, Illinois, at the time the petition in this case was filed. During 1990 and 1991, petitioner, a subchapter C corpora- tion, engaged in the insurance brokerage business. During those years, Michael W. Duncan (Mr. Duncan) operated and was the president, corporate secretary, and sole shareholder of peti- tioner. During 1990 and 1991, deposits into petitioner’s bank accounts totaled $729,261 and $963,097, respectively. As of December 31, 1989, Mr. Duncan had an outstanding loan balance of $86,562 with respect to amounts that petitioner had lent him for which petitioner did not charge Mr. Duncan any interest. (We shall refer to the interest that petitioner did not charge Mr. Duncan on his outstanding loan from petitioner as forgone interest.) During 1990 and 1991, Mr. Duncan did not pay petitioner any interest on his outstanding loan balance with petitioner. 1All Rule references are to the Tax Court Rules of Practice and Procedure. All section references are to the Internal Revenue Code (Code) in effect for the years at issue.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011