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The issue for decision is whether petitioner received
constructive dividends from a company in which he was the sole
shareholder.
FINDINGS OF FACT
The parties’ stipulation of facts and the attached exhibits
are incorporated herein by this reference, and the facts
stipulated are so found. At the time the petition was filed,
petitioner resided in Wilsonville, Oregon.
A. Petitioner’s Background
In 1995, petitioner was the president, secretary, treasurer,
and sole shareholder of Vitamin Village, Inc. (VVI), and
performed all of its managerial duties, including managing VVI’s
product research and development, production, sales, marketing,
and advertising.2 VVI, with a fiscal year ending (FYE) June 30,
was in the business of producing, distributing, and selling skin
care products, tanning lotions, diet aids, sports performance
products, nutritional supplements, health food products, and
apparel at both the retail and wholesale levels.
B. Petitioner’s Home and the Floating Structures
On September 24, 1993, petitioner purchased 1.2 acres along
the Willamette River in Newberg, Oregon, which included his
family residence and a dilapidated houseboat and a floating dock
2 Petitioner incorporated Universal Marketing, Inc. (UMI),
on June 1, 1995, to perform VVI’s branding, marketing, and
advertising.
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Last modified: November 10, 2007