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To compensate for the illusory reduction in his salary,
petitioner directed Ms. Fischer to write checks on FCE's account
payable either to cash, a fictitious subcontractor called "Delta
Design," or to Ms. Fischer herself. Ms. Fischer wrote
approximately four checks to "Delta Design" on FCE's account,
each in an amount of approximately $2,000. If the payee on the
check were Ms. Fischer, she would give the proceeds to
petitioner. Petitioner received $33,746.01 in 1988, $34,018.99
in 1989, and $6,759.86 in 1990, in this manner.
During 1988, 1989, and 1990, FCE leased a Chevrolet Corvette
for petitioner's use. During this period, FCE paid the lease
payments for this automobile, which totaled $5,417.24 in 1988,
$5,053.91 in 1989, and $2,701.59 in 1990. In addition, all
expenses relating to this automobile were paid for by FCE.
Petitioner used this vehicle for personal trips. Petitioner did
not present any documentation regarding the business use of this
vehicle.
FCE also paid for certain vacations for petitioner and Mrs.
Driggers, which included two trips to Las Vegas, Nevada, and a
trip to Miami, Florida. On occasion, FCE purchased tickets to
various professional tennis and golf tournaments for petitioner
and his wife. Petitioner did not present any evidence that any
business was conducted during these occasions.
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