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Petitioners placed the receipts for Red Caboose's expenses,
along with some of the receipts for their personal expenses, in
manilla envelopes, but the receipts were not labeled personal or
business. At the end of each year, working from memory, they
prepared a list of Red Caboose's expenses and attached the list
to the outside of the envelopes. Petitioners could not have
presented a complete set of records for Red Caboose, separate
from their personal records, at any point during the years in
issue.
Mr Lencke deposited some of the proceeds from Red Caboose
into his Tippecanoe Agency account at Valley Federal Bank, which
was the account he had maintained as an insurance agent with
United Farm Bureau Insurance Companies. The account no longer
contained funds from his former business as an insurance agent
when the Red Caboose proceeds were deposited. Mr. Lencke's
Social Security benefits were also deposited into the Tippecanoe
Agency account during the years in issue. In fact, petitioners
used some of Mr. Lencke's Social Security benefits to fund Red
Caboose. In addition, petitioners paid some of Red Caboose's
expenses with funds from their personal bank account.
6(...continued)
indicated that for 1990 and 1991 the sales were recorded in their
appointment book, and for 1992 the sales were recorded on a
separate tally sheet for each show. We have resolved this
inconsistency by finding that for 1990 and 1991 the sales were
recorded in their personal appointment book, and for 1992 the
sales were recorded on a separate tally sheet for each show.
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