Don C. and Judy Montgomery - Page 23

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                  In 1988, petitioner signed two additional checks                    
             drawn on H&B's First Interstate account and made payable                 
             to himself in the total amount of $400, and one made                     
             payable to First Interstate in the amount of $200.  During               
             respondent's examination, petitioner told the revenue agent              
             that the proceeds of these checks were used to pay expenses              
             relating to the Lincoln Mark VII.                                        
                  On January 17, 1989, petitioner signed a check drawn                
             on H&B's First Interstate account and made payable to                    
             Alexander & Strunk in the amount of $716.14.  The proceeds               
             of this check were used to purchase insurance for the                    
             Lincoln Mark VII.  Sometime in March 1989, petitioner                    
             signed a check drawn on H&B's First Interstate account and               
             made payable to First Interstate in the amount of $850.                  
             The proceeds of this check were also used to pay expenses                
             relating to the Lincoln Mark VII.                                        
                  On or about May 1, 1989, the U.S. Government issued                 
             a check payable to H&B in the amount of $19,694.92 as                    
             compensation for work H&B performed under a contract to                  
             haul fuel for the Department of Defense.  Petitioner                     
             endorsed this check and deposited the proceeds into H&B's                
             account at Community Bank.  The proceeds of this check were              
             then used to satisfy the outstanding balance of the loan                 
             used to purchase the Lincoln.                                            





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