Ella Freidus - Page 10




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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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