Billie and Florence Lykins - Page 5

               Mr. Adkins did not contemplate transferring, nor did he ever           
          transfer, any interest in Tag Coal to either Mr. Templeman or               
          petitioner.  Mr. Adkins retained his interest in Tag Coal because           
          he hoped that Tag Coal could recover the substantial amounts owed           
          to it by Commonwealth.                                                      
               On August 30, 1984, petitioner issued a check in the amount            
          of $175,970.51 to Tag Coal for the purpose of permitting Tag Coal           
          to pay its outstanding employment tax liability.  The memo entry            
          at the bottom of the check reads "Loan to Tag Coal Corp."  The              
          amount advanced by petitioner was recorded as a loan payable on             
          Tag Coal's corporate books.  Tag Coal used the proceeds from the            
          check to pay its employment tax liability.  In a document styled            
          "Agreement" dated August 30, 1984, Mr. Adkins and Mr. Templeman             
          granted petitioner a "judgement without protest" against Tag Coal           
          for a "loan made to Tag Coal".                                              
               Petitioner considered himself to be an equal partner in J &            
          M on August 30, 1984; however, he did not terminate his                     
          employment with Coal Mack at that time because Coal Mack had not            
          yet hired his successor.  Petitioner did not want to leave Coal             
          Mack until his position had been filled.  Thus, on August 30,               
          1984, petitioner was employed by Coal Mack and was simultaneously           
          performing services for J & M.  Specifically, petitioner                    
          negotiated contracts for J & M and supplied the contractors with            
          J & M's equipment.                                                          

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