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president. Mr. Young owned the remaining 50 percent of FCE's
shares and was its president. FCE paid both petitioner and Mr.
Young salaries based upon how much time each put into the company
during a given week. With the exception of a brief period during
1988, petitioner worked for FCE on a full-time basis from its
inception until the day it ceased operations in 1990. In
addition to petitioner and Mr. Young, FCE employed Theresa J.
Fischer as a receptionist/bookkeeper/office secretary.
Prior to incorporating FCE, petitioner owned his own
painting business. This business accrued Federal tax
liabilities, which petitioner failed to pay. An agent of the
Commissioner came to the offices of FCE to inquire about the
payment of these tax liabilities and issued a levy upon the wages
of petitioner. In an effort to avoid the levy of his wages,
petitioner directed that what was termed his "wages" would be
lowered to $201 per week, effective February 17, 1987.
Petitioner received checks written to him from FCE in amounts
totaling $9,616.38 in 1988, $10,296.96 in 1989, and at least
$4,997.082 in 1990.
2In auditing petitioner's 1990 tax year, respondent issued
summonses for checks written on the First Coast Engineers, Inc.
(FCE), account at Barnett Bank which were in excess of $1,000.
Therefore, if there were any checks written by FCE to petitioner
in amounts less than $1,000, they are not in the record.
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