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Resyn gradually reduced Levenson's function to checking
postings in the purchases journal by Resyn's bookkeepers.
Levenson worked about 1 day per week.
Goldstein & Co. prepared Resyn's returns for 1966 to 1969.
Goldstein began to supervise the Resyn account for Goldstein &
Co. in 1965 or 1966. Goldstein spent 5 to 10 days per year at
Resyn closing the books and preparing the corporate tax return.
Resyn's bookkeepers gave Goldstein access to Resyn's books and
records. Goldstein did not verify sales or check inventory
because he believed Resyn's staff handled those items correctly.
At the end of 1967, 1968, and 1969, Goldstein classified the
checks Resyn paid for the personal benefit of petitioners as
loans made by Resyn to petitioner. Goldstein increased
petitioner's loan account by $69,815.09 in 1967, $214,376.58 in
1968, and $189,350.46 in 1969, and decreased it by $200,000 in
1968. The decrease did not occur because petitioner repaid
Resyn. Molly Goldstein, Goldstein's mother, lent $200,000 to
Resyn in 1967. Resyn paid interest on the loan to Goldstein's
mother from 1967 to 1970. Resyn paid $30,000 of interest to
Goldstein's mother after 1968. In 1968, Goldstein transferred
the account payable from Resyn to petitioner and decreased
petitioner's loan account by $200,000. At trial, Goldstein
conceded that he had no authority to do this and that it was not
an appropriate accounting practice to decrease petitioner's loan
account by $200,000 in 1968. Goldstein's mother filed a claim in
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