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Corporations, Brown began going into the Sley Corporations’
office on a weekly basis, at night or on the weekend, to do work
for the Sley Corporations that Baybrook had left undone; at this
point, Brown was still employed by Grant Thornton. Brown did the
bookkeeping, made sure that checks were written and payroll tax
returns were filed, and answered correspondence.
Brown first met Betsy and Ben in April 1986. Thereafter,
Brown dealt with both petitioner and Betsy regarding the Sley
Corporations. Over the course of 1986, however, petitioner told
Brown to start directing questions regarding the Sley
Corporations to Betsy. After Wilson was hired as the Sley
Corporations’ bookkeeper in September 1986, Brown no longer went
into the Sley Corporations’ office on a weekly basis and mainly
dealt with Wilson over the telephone about questions concerning
the Sley Corporations when preparing the compilation financial
statements and the tax returns. Although petitioner’s status in
the Sley Corporations’ operations diminished after March 1986, he
continued to play a role throughout 1986.
In January 1987, Betsy, petitioner, and Brown met with a
bond investor; the purpose of the meeting was to have Betsy begin
to think about the investment portfolios of the Sley
Corporations, which had not changed since 1980. See supra table
1. In April 1987, Brown ended her employment with Grant
Thornton. In May 1987, petitioner and Betsy hired Brown to work
for the Sley Corporations as the comptroller; this position
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