Anthony G. and Shirley A. Olbres - Page 4

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          On May 4, 1988, White Star elected to be taxed as an S corpora-             
          tion.  At the time White Star was formed, the following individu-           
          als were appointed to the offices indicated:  Mr. Olbres as                 
          president, Ms. Olbres as treasurer, and Manuel L. Olbres as vice            
          president.                                                                  
               In addition to designing and fabricating the exhibits,                 
          Design Consultants and/or White Star arranged for certain busi-             
          nesses to perform auxiliary services (auxiliary services) for               
          their clients including, inter alia, transporting the exhibits,             
          setting up the exhibits, hiring on-site personnel at trade shows,           
          electrical work, floral arranging, and telephone services.                  
          During 1986, Design Consultants and/or White Star used, inter               
          alia, Greyhound Exposition Services (Greyhound) for certain                 
          auxiliary services, and during 1986, 1987, and 1988, they used,             
          inter alia, Mayflower Transit, Inc. (Mayflower), to perform those           
          services.                                                                   
               From sometime in 1983 through the years at issue, Design               
          Consultants was located in North Berwick, Maine.  By around 1985,           
          it had approximately 20 to 24 employees.  Mr. Olbres' responsi-             
          bilities for Design Consultants consisted of designing, ordering            
          materials for, supervising the setting up of, selling, and                  
          pricing the exhibits.  At all relevant times, Ms. Olbres, who               
          spent time caring for petitioners' children, did all of the                 
          bookkeeping for Design Consultants and White Star.                          
               During 1986 and 1987, clients of Design Consultants paid it            




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