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policy.
Because petitioner paid the wages of the construction
workers, their names were added to petitioner’s payroll list
pursuant to Atkinson’s instructions. As directed by Atkinson,
Woodle required the workers to fill out weekly timecards with the
number of hours worked. Woodle then forwarded the names of the
workers, with the corresponding number of hours worked, to the
clerk or petitioner’s controller (the controller). Because
Woodle was also on petitioner’s payroll, Woodle also informed the
clerk or the controller of the number of hours he worked for that
particular week. A professional payroll processing firm,
thereafter, prepared the payroll checks for the general manager’s
or Atkinson’s signature. After the general manager or Atkinson
signed the payroll checks, the clerk mailed the payroll checks to
a post office box in Lake Tahoe for Woodle to distribute.
Atkinson’s Discussions With Petitioner’s Accountants
Petitioner hired an accounting firm to prepare its Federal
corporate income tax returns (corporate tax returns) for the
taxable periods ending March 31, 1985, March 31, 1986, and May
31, 1986. A certified public accountant at the accounting firm,
David Dunkin (Dunkin), had primary responsibility for preparing,
reviewing, and submitting the corporate tax returns to
petitioner. Dunkin also prepared the Atkinsons’ 1985 and 1986
Federal individual income tax returns (individual tax returns).
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Last modified: May 25, 2011