Albert C. Johnson - Page 6

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          Following a quarantine period required under U.S. law, petitioner           
          would drive a truck with a trailer from Tennessee to the Canadian           
          border where he would pick up the impregnated heifers.  Petitioner          
          would then return to Tennessee and deliver the heifers to the               
          ultimate buyers.  Occasionally, the Vanderhaydens would travel to           
          Tennessee to pick up the proceeds from the sales of the heifers.            
               Petitioner did not specifically travel to Canada in order to           
          broker the deals on behalf of Mr. Stennett or the Vanderhaydens.            
          Rather, he would travel to Canada to purchase cattle for himself            
          and concurrently pick up heifers implanted with Belgian blue                
          embryos (in his broker capacity) and deliver them to the ultimate           
               A majority of the transactions engaged in by petitioner were           
          completed informally, often on a handshake.  Contracts or other             
          documentation of transactions was rare, although registration of            
          Belgian blue cattle did occur.                                              
               Petitioner did not maintain any books or records that                  
          accurately reflected his cattle operations or sales he made on              
          behalf of others.  During the years in issue, petitioner utilized           
          a bank account at Third National Bank, account number 8651884, for          
          his business operations. That account was in the names of                   
          petitioner and his wife.                                                    
               Because of petitioner's failure to file Federal income tax             
          returns for the years in issue, an agent of the Internal Revenue            

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