Bill McDonald - Page 11

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          to him for 1989.  Maynard testified that all payments to                    
          petitioners for 1989 from the Bank of Lodi were his income or               
          expense reimbursement.                                                      
               Gold, during 1989, paid the California Society of Certified            
          Public Accountants $16,325.36 for health insurance for several              
          individuals, including petitioners.  One of those individuals was           
          McDonald’s former accounting partner, who reimbursed Gold                   
          $2,765.44 for his portion of the insurance.  The remaining                  
          insured individuals were petitioners and members of their                   
          families.  Although petitioners prepared returns on behalf of               
          Gold, they claim to have not received any compensation other than           
          the monthly automobile reimbursement and insurance coverage.                
               Maynard did not have a personal bank account, and he paid              
          bills with cash or checks from the checking account of another              
          individual.  McDonald and Maynard, during 1989, made cash                   
          purchases of numerous cashier’s checks in amounts of $10,000 or             
          less for various purposes.  Maynard purchased two $7,500                    
          cashier’s checks on June 8, 1989, from two separate banks.  On              
          that same date, McDonald purchased a $9,000 and a $10,000                   
          cashier’s check from separate banks.  A series of cashier’s                 
          checks, including the ones purchased on June 8, 1989, was used as           
          part of the purchase price of a residence which was placed in the           
          name of McDonald’s wife.  McDonald purchased numerous cashier’s             
          checks, mostly with cash, during 1989.  The dates, amounts, and             
          bank locations were as follows:                                             

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