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a coal-related business. Mr. Templeman is petitioner Florence
Lykins' (Mrs. Lykins) son.
Mr. Templeman and John Adkins (Mr. Adkins) were sole, equal
partners in J & M Equipment Co. (J & M), a partnership engaged in
the business of leasing, as lessor, heavy machinery used for
grading and excavating property connected with construction
projects and coal mining. The record does not clearly indicate
the specific amount of J & M's outstanding liabilities; however,
it appears that J & M had outstanding liabilities of
approximately $700,000.
Mr. Templeman and Mr. Adkins were also sole, equal
shareholders in Tag Coal Corp. (Tag Coal), a corporation that
performed grading and excavation services for construction
projects located in eastern Kentucky. Tag Coal leased equipment
from J & M in order to conduct its business. Tag Coal was the
primary lessee and customer of J & M.
In August 1984, Tag Coal was performing general excavation
work for Commonwealth Development Corp. (Commonwealth). Although
Tag Coal was ultimately liable for employment taxes incurred in
connection with the excavation work, the terms of the contract
between Commonwealth and Tag Coal required Commonwealth to pay
the employment taxes incurred by Tag Coal. However, before the
project was completed, Commonwealth filed for bankruptcy and
failed to pay $175,970.51 in employment taxes owed by Tag Coal.
Commonwealth also failed to pay approximately $1,000,000 in other
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