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the record before us, we find that petitioners have failed to
carry their burden of establishing that during 1994 Delaware
Corporation’s payments of those legal fees did not confer an
economic benefit on Mr. Barber.
Based upon our examination of the entire record before us,
we find that petitioners have failed to carry their burden of
establishing (1) that Delaware Corporation’s payments during 1994
of the legal fees with respect to the Mitchums Creek property do
not constitute constructive dividends to Mr. Barber for that year
and (2) that Delaware Corporation is entitled to deduct such
legal fees for that year.20
1994 Child Care Expenses and 1995 Child Care Expenses
In support of their position with respect to the disputed
child care expenses, petitioners argue:
Payment of childcare expenses for employees is a de-
ductible expense.
* * * * * * *
* * * Barber received neither benefit nor income
20Although not altogether clear, petitioners may also be
arguing that Delaware Corporation’s payments of the legal fees
with respect to the Mitchums Creek property do not constitute
constructive dividends to Mr. Barber because such payments were
part of the “consideration for the purchase” of the Mitchums
Creek property. Any such argument not only ignores that a
corporation’s conferring an economic benefit on a stockholder is
a constructive dividend to that stockholder, see, e.g., Magnon v.
Commissioner, 73 T.C. 980, 993-994 (1980), it also is inconsis-
tent with petitioners’ position that Delaware Corporation is
entitled to deduct its payments of the legal fees with respect to
the Mitchums Creek property.
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