Eric B. Benson, et al. - Page 16

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          this label does not reflect the true nature of these transfers.             
          For purposes of section 6501(e)(1)(A)(ii), we hold that the NPI             
          returns failed to adequately disclose the nature and amounts of             
          these transfers.                                                            
                    2.   Rental Income                                                
               The Bensons also argue that the returns of NPI disclose the            
          rents received by NPI, and that the Bensons’ constructive                   
          dividends related to the Lowell and Stanford plants were                    
          adequately disclosed on their returns.  Respondent contends that            
          the disclosures of gross rental income reported on the returns of           
          NPI did not give respondent a clue as to the nature and amounts             
          of these payments that we found to be constructive dividends.               
               We agree with respondent.  The returns of NPI reported gross           
          rental income from “MFG Facilities”; however, these returns do              
          not specifically identify the properties that generated the                 
          rental income.  The Stanford and Lowell plants were identified              
          only in NPI’s depreciation schedules.                                       
               With respect to the Lowell plant, in our prior opinion we              
               ERG had no contractual obligation to pay Aker’s rent                   
               obligations.  Indeed, it was, as the arbitrators                       
               concluded, Aker’s responsibility to pay NPI for the use                
               of the Lowell plant, which Glendon ultimately paid by                  
               virtue of the final arbitration decision.  This, of                    
               course, is in accord with what the brothers agreed in                  
               the unbundling agreement.  Given that these funds were                 
               transferred to NPI, which the Bensons used for their                   
               personal benefit * * * we find and hold that the                       
               Bensons received constructive dividends in the amounts                 

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