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shareholder so that the corporation might compete successfully
for certain contracts.
Notwithstanding the transfer of legal ownership of CWS to
Ms. Gutierrez, petitioner continued to prepare CWS bids for
welding projects and secure welding contracts based on his
reputation in the welding industry. It was his knowledge that
enabled CWS to compete for and obtain contracts. No doubt, Ms.
Gutierrez was, to some extent, active in the corporation. She
arranged for the filing of the corporate income tax returns and
paid corporate bills. But it appears that she did what she did
as a convenience to petitioner who was frequently away from home
working on contracts he secured for CWS. Petitioner negotiated
the income-generating contracts that CWS was awarded; he worked
on the jobs pursuant to those contracts; and he must have been
aware of the profitability of each job and the overall financial
situation of CWS. Furthermore, having drawn no compensation from
CWS during the years in issue, he also must have been aware that
the corporation was paying for a variety of his and his family’s
personal expenses, including the renovations of the existing
structures and the construction of the castle residence on the
Mystic Lake property.
Petitioner’s actual connection with CWS, as opposed to any
formal status as a stockholder during the years in issue, is
further evidenced by the fact that all of the stock in the
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Last modified: May 25, 2011