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documents relating to the purchase by Mr. Scott and Ms. Scott,
respectively, of certain stock of AST, which did not reflect the
price for each such purchase. In response, Mr. Scott advised Mr.
Hrynik that Mr. Scott would take responsibility for negotiating
that purchase price with AST.
Mr. Hrynik's review of the MSSTA transaction draft documents
led him to inform Mr. Scott that, because the transactions re-
flected in those documents were to take place simultaneously and
in no particular order, the Service might consider them to be one
transaction for tax purposes. In response, Mr. Scott told Mr.
Hrynik not to spend very much time reviewing the tax consequences
of the MSSTA transaction because Mr. Scott had consulted with
AST's accountants and Mr. Scott believed that he understood the
tax consequences of that transaction.
On September 7, 1989, MSSTA and AST entered into an
"AGREEMENT FOR PURCHASE AND SALE OF ASSETS" (asset purchase
agreement) which stated that MSSTA would, inter alia, sell its
assets to AST for $300,000. On or about the same date, Mr.
Scott, Mr. Carter, Mr. Harrison, Mr. Hall, MSSTA, and AST agreed
that MSSTA would retain 45 customer accounts that were known as S
accounts (S accounts). Mr. Scott estimated that the retention of
those accounts by MSSTA would generate approximately $10,000 a
month in revenues, the approximate amount that was needed each
month in order for MSSTA to meet its existing lease obligation
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