J. Randall and Jane B. Groves - Page 3




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          represented clients before the IRS, established trusts and                   
          provided estate planning services for clients, was a member of               
          the North Carolina Bar Association Section of Taxation (which he             
          had previously chaired), chaired the Southeastern Region Special             
          Liaison Tax Committee (not further identified in the record), and            
          managed his law firm.  Also in those years, petitioner was an                
          elder of the Calvary Church and a member of its finance and                  
          building committees.  He also negotiated a $17 million                       
          construction loan for the Calvary Church, formed the St.                     
          Catherine partnership with two of his law partners to manage the             
          construction and leasing of a building for Weinstein and                     
          Sturgess, cared for his mother during a long illness, invested in            
          a Texas corporation that was the plaintiff in a class action                 
          lawsuit for which petitioner hired the attorney and in which he              
          participated extensively, and was a member of the board of                   
          directors of One Price Clothing Stores, Inc., discussed at                   
          paragraph B-2, below.                                                        
          B.   Petitioner's Investment in Women's Clothing Stores                      
               1.   Formation of J.K. Apparel                                          
               In 1984, Edward and Arlene Karp (the Karps), Henry Jacobs               
          (Jacobs), Raymond Waters (Waters), John Waters, and petitioner               
          decided to open a women's clothing store which would sell                    
          everything at one price.  In June 1984, they incorporated J.K.               
          Apparel, Inc. (J.K. Apparel), in North Carolina.  J.K. Apparel               






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