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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
stated:
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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