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corporation in 1999 for a permanent seat license allowing him to
buy six season tickets to Houston Texans football games was a
constructive dividend to petitioners. We hold that it was.
References to petitioner are to Stephen M. Kerns. Section
references are to the Internal Revenue Code in effect for the
years in issue. Rule references are to the Tax Court Rules of
Practice and Procedure.
Background
The parties submitted this case fully stipulated under Rule
122.
A. Petitioners and InsurMark
Petitioners resided in Houston, Texas, when they filed their
petition.
In 1998 and 1999, petitioners owned 100 percent of the stock
of InsurMark, Inc., a corporation which sells annuities to
insurance and financial agents. Petitioner was the president and
chief executive officer of InsurMark, Inc., in 1998 and 1999 and
is currently its president.
B. The Permanent Seat License
On December 31, 1999, petitioner submitted an application to
the Harris County-Houston Sports Authority for a permanent seat
license under which petitioner had the right to buy six season
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