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frequently were made several months after the Mexican produce
growing season ending in April or May. For the years 1989
through 1992, Apache transferred sales proceeds from the Canelos
growers' produce in the amounts of $11,651,670 to petitioner's
account and $15,000 to the bank account of Mr. Canelos' wife.
On its Federal corporate income tax returns for years ending
August 31, 1989, through 1992, Apache reported gross receipts of
$705,566, $801,037, $756,640, and $270,999; interest income of
$23,102, $89,078, $53,142, and $29,738; cost of goods sold of
$353,850, $363,345, $228,847, and $11,281; and taxable income
(loss) of $99,084, $78,104, $101,246, and ($278,837).
Mr. Padilla was Apache's primary salesman, and Apache had
fewer employees than petitioner. Apache's fixed costs were lower
than petitioner's fixed costs. Mr. Maldonado, on behalf of Mr.
Canelos and the Canelos growers, and Mr. Padilla, on behalf of
Apache, determined the commission rate that Apache would receive
for selling the Canelos growers' produce. Mr. Maldonado had no
selling, marketing, or operational responsibilities for Apache.
Bud Antle
Beginning in 1986 and continuing through a portion of 1989,
Bud Antle distributed celery, brussels sprouts, and,
subsequently, lettuce for the Canelos growers as part of the SCP
deal. Initially, Bud Antle received a commission of 10 percent
of sales, one-half of which was absorbed by SCP. Petitioner
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