William H. Breucher III - Page 12

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          time of the withdrawals or advances, the shareholder intended to            
          repay the amounts received and the corporation intended to                  
          require repayment.  Miele v. Commissioner, 56 T.C. 556, 567                 
          (1971), affd. without published opinion 474 F.2d 1338 (3d Cir.              
          1973).  Respondent’s determination that the withdrawals or                  
          advances constitute constructive dividends, and therefore gross             
          income, is presumptively correct, and petitioners bear the burden           
          of proving that respondent’s determination is erroneous.  Rule              
          142(a); Welch v. Helvering, 290 U.S. 111 (1933); Miele v.                   
          Commissioner, supra at 567.  Section 7491(a) shifts the burden of           
          proof to the Commissioner under certain circumstances.  The                 
          burden does not shift with respect to any factual issue relating            
          to the present cases because petitioners did not introduce                  
          credible evidence.  Sec. 7491(a)(1).                                        
               A court may look to various factors to determine intent to             
          repay, but, once the taxpayer’s intent is found, that finding is            
          conclusive of the legal issue of loans versus dividends.  Busch             
          v. Commissioner, 728 F.2d 945, 948-949 (7th Cir. 1984), affg.               
          T.C. Memo. 1983-98.  The issue of taxpayer intent in the loan               
          versus dividend context is a question of fact, and, even though             
          one must look at objective facts to determine intent, it is the             
          taxpayer’s actual intent or actual motive with which the Court is           
          concerned.  Id. at 949; see also United States v. Pomponio, 563             
          F.2d 659, 662 (4th Cir. 1977); Livernois Trust v. Commissioner,             

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