Ralph D. Crowley and Frances A. Crowley v. Commissioner of Internal Revenue

CYR, Circuit Judge.

The Internal Revenue Service (“IRS”) assessed a $206,935 deficiency against appellants Ralph and Frances Crowley based on their failure to declare, as taxable income in 1982, $443,769 in discretionary withdrawals by Ralph Crowley from Polar Corporation (“Polar”), a closely-held corporation of which Ralph and his three brothers were the only individual shareholders. The IRS determined that the alleged loans were taxable as “constructive dividends.” The Tax Court upheld the deficiency assessment against appellants. We affirm.

I

FACTS 1

In 1982, the four Crowley brothers 2 each…