Bradley K. Morrison - Page 3

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               During 1999, Caspian paid $40,000 to the Internal Revenue              
          Service and $8,000 to the California Franchise Tax Board to                 
          satisfy petitioner’s tax liabilities.  Caspian also made                    
          disbursements of $200,000 and $32,623 directly to petitioner                
          during 1999.  These payments and disbursements will hereinafter             
          be referred to as the 1999 payments and disbursements.                      
               During 2000, petitioner charged $26,338 to a company credit            
          card for personal items (2000 personal charges).  Petitioner                
          reimbursed Caspian $14,059 through payroll deductions in 2000.              
                                       OPINION                                        
          I.   Burden of Proof                                                        
               Petitioner does not assert that section 7491(a) shifts the             
          burden of proof to respondent.  Petitioner also did not satisfy             
          the requirements of section 7491(a)(2).  Therefore, petitioner              
          bears the burden of proof.  Rule 142(a).                                    
          II. Loan Analysis                                                           
               Petitioner contends that the 1999 payments and disbursements           
          and the 2000 personal charges were loans.  Respondent determined            
          that the 1999 payments and disbursements and the 2000 personal              
          charges were constructive dividends to petitioner.                          
               The Court of Appeals for the Ninth Circuit defines a loan as           
          “‘an agreement, either express or implied, whereby one person               
          advances money to the other and the other agrees to repay it upon           
          such terms as to time and rate of interest, or without interest,            






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