Combat Toys Inc. has an accumulated deficit and current E\&P of \(\$ 20,000\). Joe Gunn, a 60 percent shareholder, withdrew \(\$ 35,000\) from the corporation. Joe reported no income from the transaction, and upon audit he claimed it was a loan. No note had been executed, but on the eve of the audit, Joe signed a demand note for \(\$ 35,000\), payable to Combat Toys. The IRS claims Joe has a dividend of \(\$ 35,000\). What is the most likely result if the case goes to court?