- 3 -
2. Presence or Absence of a Fixed Maturity Date... 95
3. Source of the Repayment........................ 97
4. The Right To Enforce the Payments.............. 98
5. Participation in Management.................... 99
6. Status Relative to Other Creditors............. 100
7. Intent of the Parties.......................... 101
8. Thin or Adequate Capitalization................ 102
9. Identity of Interest........................... 104
10. Payment of Interest Only Out of Dividends...... 105
11. Ability To Obtain Loans From Outside Lending
Institutions................................... 106
C. Conclusion and Holdings............................ 107
III. The $2 Million Fee..................................... 110
A. The Assignment of Income Doctrine.................. 110
B. The Parties’ Arguments............................. 112
1. Petitioner’s Arguments......................... 112
2. Respondent’s Arguments......................... 113
C. Analysis and Holding............................... 114
1. Petitioner’s Agreement With NSI................ 114
2. CKH’s and Petitioner’s Purported Fee-Splitting
Agreement...................................... 114
3. Petitioner’s Entitlement to a Business
Deduction...................................... 118
IV. Petitioner’s Advances to Koehler....................... 119
V. Is Petitioner Liable for Penalties Under Section 6662?. 122
Appendixes
Appendix A--Flow Chart Reflecting the Basic Elements of
the Transactions in the Two Lease Strip Deals. 129
Appendix B--Summary of Appendix A......................... 132
Appendix C--Existing End User Equipment Rental MonthlY
Payments That HCA Purchased................... 133
MEMORANDUM FINDINGS OF FACT AND OPINION
GERBER, Chief Judge: Respondent determined income tax
deficiencies, an addition to tax, and penalties with respect to
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Last modified: May 25, 2011