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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
buyer.
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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Last modified: May 25, 2011