May T. Rakow - Page 3




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          Illinois.  IHC obtained its work through bids.  Some requests for           
          bids, such as those for public or municipal jobs, were                      
          advertised.  In contrast, the utilities, that is, the power and             
          telephone companies, would send invitations to bid to IHC and               
          other preselected companies.  IHC performed most of its contracts           
          alone, without subcontracting significant portions of the work.             
               IHC has done work for the utilities for about 50 years.  Two           
          of its major clients were Ameritech, a telephone company, and               
          Commonwealth Edison, a power company.  In the 5-year period                 
          spanning fiscal years ended April 30, 1988 through 1992, these              
          two major clients contributed from 33 to 49 percent of its                  
          revenues.                                                                   
               Thomas Rakow (Mr. Rakow), petitioner’s son, has been                   
          president of IHC since the early 1980’s.  Petitioner also was a             
          full-time officer of IHC.  IHC paid Mr. Rakow and petitioner as             
          follows:                                                                    
               Year Ended               Mr. Rakow       Petitioner                    
               Apr. 30, 1988            $106,600       $52,000                        
               Apr. 30, 1989            158,700        70,800                         
               Apr. 30, 1990            233,350        77,600                         
               Apr. 30, 1991            307,400        91,600                         
               Apr. 30, 1992            312,590        91,600                         
               IHC’s income statement for its fiscal year ended April 30,             
          1992, prepared by independent auditors, reports the following:              








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