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constituted constructive dividends to Burton in the year of
transfer.
2. ERG-Recreation Fund Account
Respondent submitted copies of canceled checks and bank
statements for the ERG-Recreation fund account. Petitioners
conceded that many of the ERG-Recreation fund account items
constituted constructive dividends to Burton. See appendix, par.
7. Melody Carter, ERG’s administrative assistant, testified that
this account was funded with moneys that ERG received “from
recycling cans, recycling cardboard, refunds”, etc. She stated:
“I’ll apply for the refund; the refund will go into that fund.”
She also testified that this account was used to “purchase
baseball tickets, to purchase Christmas parties, company picnic,
weight room equipment, things of that nature.”53
Respondent demonstrated that Burton was the sole signatory
for this account and withdrew funds from this account. In
addition to the canceled checks proffered by respondent and
Burton’s concessions, the Court notes that the Bensons failed to
provide evidence that any specific amounts withdrawn were used
for ERG’s business purposes. In fact, the checks at issue
provide a contrary inference that the ERG-Recreation fund was
53Burton testified that at least one ERG Christmas party was
not paid from this account but was instead charged to a corporate
credit card. See discussion infra. There is no indication that
funds from this account were used to pay this bill.
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