James B. Miller, Jr. - Page 5

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          living and dining room area.  Petitioner had six telephone lines            
          running into the home office.                                               
               As indicated, petitioner paid employees of his scrap metal             
          recycling business in cash.  Employees of petitioner’s scrap                
          metal recycling business were generally hired on a temporary                
          basis by petitioner’s warehouse foreman.  The employees generally           
          were transient or homeless individuals and worked in the                    
          warehouse.  Employees of petitioner’s scrap metal recycling                 
          business were required to sign a written agreement, but there was           
          no line on the agreement to indicate an employee's Social                   
          Security number or personal address, and neither petitioner nor             
          the warehouse foreman generally obtained Social Security numbers            
          or addresses of the employees.                                              
               Petitioner did not prepare and submit Forms W-2 or 1099 with           
          respect to wages paid to employees of his scrap metal recycling             
          business, and petitioner withheld no Federal or State taxes with            
          regard to wages paid to his employees.                                      
               At the end of each day, petitioner’s warehouse foreman would           
          prepare a written cash report and would indicate thereon amounts            
          paid and received that day from the purchase and resale of scrap            
          metal, wages paid to employees, and expenses paid at the                    
          warehouse.  Generally, at the end of each day the warehouse                 
          foreman also would call petitioner and provide petitioner with              
          information concerning the cash received and spent at the                   
          warehouse that day.                                                         




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Last modified: May 25, 2011