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other clients. If these proceeds were to be held for a long
time, Burns transferred the funds to an interest bearing account
called the Pierpont Fund Money Market at Morgan Guaranty
(Pierpont Account). The money market account was held under the
identification number of Burns' law firm, the fact of which
petitioner was aware. The account held only petitioner's funds
and existed only for her benefit and her corporations' benefit.
With petitioner's consent, Burns disbursed money from her
Pierpont Account and from her client escrow account to various
third parties. These disbursements were in partial satisfaction
of petitioner's then existing business and personal liabilities.
Only petitioner authorized disbursements from these accounts.
Burns furnished petitioner with Form 1099 each year for
accrued interest from the Pierpont Account. Petitioner earned
interest in the amounts of $14,350, $13,637, $1,951, and $6,440
for the taxable years 1987, 1988, 1989, and 1990, respectively.
During the years in issue, an account in the name of Ivory
Ranch was maintained at Chase Manhattan Bank (Chase). Petitioner
signed all of its disbursement checks. Ivory Ranch's net
deposits were as follows: $772,137, $780,254, $71,471, and
$114,361 for the taxable years 1987, 1988, 1989, and 1990,
respectively. The checks petitioner drew upon this account were
as follows: $13,900, $11,000, $1,500, and $9,120 for the taxable
years, 1987, 1988, 1989, and 1990, respectively.
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