Affiliated Research, Inc. v. The United States

COLLINS, Judge.

The issue in this action for the refund of corporate income taxes is whether plaintiff is entitled to a deduction for certain amounts which, according to plaintiff, constituted interest payments. 1 Defendant contends that the payments in question were dividends, not interest. In order to resolve this dispute, we must determine whether the advances with respect to which the payments were made represented (1) loans to plaintiff or (2) contributions to the capital of plaintiff.

The factual background, which is set forth in detail in the findings of fact, can be summarized as…