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loans at issue--two from GXE and one from GITIC. Respondent
seems to interpret the Forms 5472 as reporting petitioner’s
payment of interest on two loans from GXE and none from GITIC.
Respondent argues that all interest reported on the Forms 5472
was attributable to GXE loans and was properly subject to U.S.
income tax withholding. Respondent urges this Court to treat
petitioner’s Forms 5472 as admissions that can only be overcome
by cogent proof. See Estate of Hall v. Commissioner, 92 T.C.
312, 337-338 (1989); Estate of Baird v. Commissioner, T.C. Memo.
2002-299, revd. on other grounds and remanded 416 F.3d 442 (5th
Cir. 2005).
1. Number of Loans Made by GXE
The preponderance of the evidence establishes that, during
the years in issue, petitioner had at least one outstanding loan
from GXE with a principal balance of $2 million and one
outstanding loan from GITIC with a principal balance of $2
million. Moreover, we are satisfied that regardless of the
number of loans that petitioner may have obtained from GXE, the
principal balance of the GXE loan(s) during the years in issue
did not exceed $2 million. Mr. Wong credibly testified that
petitioner received only $2 million from GXE. The interest
payments recorded in petitioner’s general ledger for 1995 and
1996 match the amounts petitioner reported to Mr. Steinhardt in
the September 8, 1998, letter that showed one loan by GXE and one
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