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No. 2 was the same as that of petitioner. The parties now agree
that petitioner and No. 2 are really one corporation, and the
notice of deficiency generally has combined the gross receipts,
costs of sales, income, and deductions reported on the corporate
tax returns of the two.
Petitioner had seven employees, five of whom, including
Berry, were technicians. The technicians worked at the
customers' sites.
Since its inception, petitioner has leased property owned by
Berry and his wife (the property) for its offices and parts
department. Prior to petitioner's use of the property, it had
served as the Berrys' personal residence. The property consists
of a 2,031-square-foot house and two storage sheds (70 and 130
square feet, respectively) on three-quarters of an acre of land.
Petitioner stored pipefittings and insulation in the two
sheds. Welding equipment and a pipe rack stood outside. The
gravel driveway was large enough to park nine vehicles, including
a van and a 1-ton truck. Generally, four or five vehicles would
be parked there for some period during a normal business day.
Petitioner had no identifying signs on the property other than
those on the truck when it was parked there. The property had a
well and septic system and was not served by city water or sewer.
The property is located on Neelley Road in Pleasant Garden,
North Carolina. During the years at issue, Pleasant Garden was a
rural community that was becoming increasingly suburban, with the
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Last modified: May 25, 2011