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amount. During the audit, it was indicated that this amounts
[sic] was never paid to the petitioners or Alofs.” Certain
copies of the Schedule K-1 issued to Mr. Gleason for Excellence’s
FYE 1996 shows a $196,000 property distribution to which a
handwritten notation “NEVER PAID” has been affixed. Petitioners
do not contest that the funds were never paid; in fact,
Mr. Gleason’s testimony indicated that it was he who added the
just-mentioned notation.
In general, petitioners’ references at trial and on brief
with respect to the $196,000 are akin in their rambling and
nebulous tenor to those addressed above concerning the $500,000
and $400,000 amounts. Petitioners offer on opening brief that
“another $196,000 Alofs/Target stock purchase was funded by
agreement not to accept $196,000 Excellence owned dividend”. On
reply brief, they explain:
Respondent’s statement is correct in that it was never
paid to petitioner, but was treated as a reduction in
cash required for purchase of stock from sellers, and
Comerica agreed to permit Petitioner to withdraw
$196,000 from companies without bank restrictions by
April 10, 1996. Because of the cash poor conditions of
the company, Petitioner elected To leave this money in
the company until cash was available. * * *
Mr. Gleason’s testimony at trial continued in a similar vein,
characterizing the $196,000 as some form of foregone
distribution.
Again, the Court is lacking in any clear evidence as to
precisely what transpired with respect to the $196,000 or how it
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