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As for hiring, Ginger had sole authority over whether the
company needed a new employee. Petitioner had very low turnover,
and Ginger discouraged hiring additional staff because he wanted
to keep overhead as low as possible. Every applicant completed
an application and a health screening. Ginger frequently made
the final hiring decision, but Adams also had the authority to
hire a new employee who would be working on a site that he
supervised. Adams had the authority to fire new employees
working on the sites that he supervised. He did not, however,
have the authority to fire an established employee. Ginger
decided whether to fire an established employee.
During the years in issue, Cheri Lawrence (Lawrence),
Ginger's sister, worked as petitioner's bookkeeper. She does not
have a degree in accounting. Lawrence entered the accounts
payable and accounts receivable, prepared quarterly reports
submitted to the Internal Revenue Service, and made entries into
the general ledger. Lawrence reviewed the financial statements
for accuracy, but she did not set petitioner's financial policy.
Kay Peterson (Peterson), Ginger's mother, worked as an office
manager and paid minor expenses, such as utilities, phone, and
office supplies. Peterson and Ginger were the only persons with
signatory authority on petitioner's checking account.
Ginger made all of petitioner's financial decisions and set
financial policy. The bookkeeper entered the numbers, and, with
Ginger's help, assembled a monthly report. Ginger reviewed the
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