Corporation’s Payment of Personal Expenses Is a Constructive Dividend

According to the Tax Court there was a constructive dividend taxable to an engineer who owned a C corporation as a result of cash withdrawals, electronic transfers to his personal account, and payments of personal and meal expenses, from the corporation’s bank account. The corporation has sufficient revenue to justify a taxable dividend, and it didn’t keep separate books and records, making it impossible to distinguish between corporate and personal expenses.