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of his own making”, the burden of proving that Sam Kong Fashions
incurred additional expenses bears heavily on petitioners. Cohan
v. Commissioner, 39 F.2d at 544. Again, we note that Mr. Kong,
who would be the most knowledgeable person regarding the claimed
additional business expenses, chose not to testify. We decline
petitioners’ invitation to estimate additional business expenses
using respondent’s statistical data.
The unreported gross receipts of Sam Kong Fashions total
$391,856.25 in 1994 and $303,918.64 in 1995. See supra p. 17.
We find that Sam Kong Fashions is entitled to deduct cash wage
payments made to Bi Ling Wu of $10,000 in 1994 and 1995. See
supra pp. 19-20. Additionally, we find that Sam Kong Fashions is
entitled to deduct cash wage payments made to Wan Zi Chen of
$22,880 in 1994 and 1995. See supra pp. 19-20. After taking
into consideration the cash payments made to Bi Ling Wu and Wan
Zi Chen, we hold that Sam Kong Fashions had unreported taxable
income of $358,976.25 in 1994 and $271,038.64 in 1995.
C. Constructive Dividends Received by Mr. Kong
A dividend is a distribution of property made by a
corporation to its shareholders from its earnings and profits.
Sec. 316(a). A shareholder may receive a dividend even though
the corporation has not formally declared a distribution.
Truesdell v. Commissioner, 89 T.C. 1280, 1295 (1987). When the
corporation confers an economic benefit on a shareholder from
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