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Around 1981, Mr. Mohney asked Janet Dingeman Fournier
(Ms. Fournier) to serve as petitioner's president. Ms. Fournier
served in this capacity until 1988. As petitioner’s president,
Ms. Fournier had no meaningful responsibility other than to sign
tax returns and other documents on petitioner’s behalf. Aside
from Ms. Fournier, petitioner had no employees. Apart from the
use of company cars, Ms. Fournier received no compensation from
petitioner.
From 1974 through 1993, Ms. Fournier was also an employee of
Modern Bookkeeping Services, Inc. (MBS). Mr. Mohney had formed
MBS to handle and centralize the bookkeeping and tax preparation
aspects of his businesses. Elizabeth L. Scribner (Ms. Scribner)
was MBS’ president and general manager. Thomas H. Tompkins
(Mr. Tompkins) was MBS’ accountant, and he was responsible for
preparing petitioner's Federal income returns before the subject
years. Lee J. Klein (Mr. Klein) provided legal services to MBS
and MBS’ clients.
Petitioner's financial affairs were maintained at MBS’
office in Durand, Michigan, and MBS maintained all of
petitioner's files, including its bank accounts, cash receipts
journals, cash disbursements journals, and lease files. MBS paid
petitioner's bills on behalf of it, and MBS prepared petitioner’s
financial statements. MBS charged petitioner a fee of $1,000
per month for its bookkeeping services.
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