Edgar and Doris Brown - Page 3

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               During the year in issue, Mr. Brown operated a tree stumping           
          business, in which he removed tree stumps from the ground in                
          Mississippi and transported them to Brunswick, Georgia, to be               
          processed by Hercules, Inc. (Hercules), which paid him for the              
          stump wood that he delivered.  In his business, Mr. Brown used at           
          least three Caterpillar tractors, two loaders, two trucks with              
          trailers, and two pickup trucks.  Mrs. Brown maintained                     
          petitioners' books and records, including those pertaining to Mr.           
          Brown's tree stumping business, and stored the records in                   
          petitioners' house.                                                         
               Mr. Brown maintained a shop in Fruitdale, Alabama, where he            
          repaired his tree stumping equipment.  For more difficult repair            
          jobs, Mr. Brown sent his equipment to a garage in Richland.                 
               Mr. Brown also served as pastor to a small church in                   
          Mississippi.  In his ministry, Mr. Brown, inter alia,                       
          evangelized, visited people in hospitals, and attended wakes.               
               During September 1994, Willie Sue Daniels, a tax auditor               
          with respondent, met with Mrs. Brown to examine petitioners' 1991           
          return.  At the meeting, Mrs. Brown produced substantiation for             
          certain deductions that petitioners had claimed on their return.            
          In order to complete the audit, Ms. Daniels scheduled a second              
          meeting, which Mrs. Brown missed because she was out of town                
          attending a funeral.  On or around September 28, 1994, respondent           
          issued petitioners an initial report stating that their 1991                






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