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1984, Chicago Title issued a check in the amount of $28,000
payable to Savko and petitioner. The check was endorsed by Savko
and petitioner and made payable to Newtowne on April 17, 1984.
The $28,000 was applied to petitioner's construction account at
Newtowne. Petitioner failed to report this amount as income on
his 1984 return.
Branam served as treasurer of Newtowne from May 1982 to
September 1988. When Branam first received the check drawn on
the Chicago Title account, he questioned why it should be applied
to petitioner's construction account. Savko indicated that the
check was in partial payment of petitioner's consulting services.
Upon receiving this information, Branam credited this check to
petitioner's account.
The total amount of credits applied to petitioner's
construction account was not reported on his 1983 and 1984
returns. As indicated above, Meeks was unaware that petitioner
was subsidizing the construction of his home with his purported
financial consulting services through Newtowne and Savko.
(d) The Ford Van
In 1982, Newtowne was working on the first phase in a real
estate project, the Saltergate Village project, with one of the
partnerships. Forster, who was vice president of Newtowne during
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