Paul L. Tregre, Jr. - Page 6

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                         1976      14,030                                             
                         1977      19,152                                             
                         1978      18,300                                             
                         1979      18,362                                             
          Similarly, during the years at issue, Besco paid petitioner the             
          following amounts in connection with its sales to the paint                 
          department:                                                                 
                         Year      Amount                                             
                         1980      $21,315                                            
                         1981      25,377                                             
                         1982      19,274                                             
                         1983      17,642                                             
          Besco reported all payments to the Internal Revenue Service                 
          (IRS) on Forms 1099 Misc.  Petitioner, in turn, reported receipt            
          of the above amounts on his returns for each respective taxable             
          year.                                                                       
               In 1974, Tubre had a meeting with an ASI vice president                
          named Clark.  During the course of that meeting, Clark instructed           
          Tubre to cease paying ASI employees for their involvement in "in            
          the yard" activities.   Tubre informed petitioner, Kahn, and                
          Steiner of his conversation with Clark.  He also told petitioner            
          that Besco intended to comply with Clark’s directive.  The                  
          payments, however, continued despite Tubre's reservations.                  








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