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Illinois. IHC obtained its work through bids. Some requests for
bids, such as those for public or municipal jobs, were
advertised. In contrast, the utilities, that is, the power and
telephone companies, would send invitations to bid to IHC and
other preselected companies. IHC performed most of its contracts
alone, without subcontracting significant portions of the work.
IHC has done work for the utilities for about 50 years. Two
of its major clients were Ameritech, a telephone company, and
Commonwealth Edison, a power company. In the 5-year period
spanning fiscal years ended April 30, 1988 through 1992, these
two major clients contributed from 33 to 49 percent of its
revenues.
Thomas Rakow (Mr. Rakow), petitioner’s son, has been
president of IHC since the early 1980’s. Petitioner also was a
full-time officer of IHC. IHC paid Mr. Rakow and petitioner as
follows:
Year Ended Mr. Rakow Petitioner
Apr. 30, 1988 $106,600 $52,000
Apr. 30, 1989 158,700 70,800
Apr. 30, 1990 233,350 77,600
Apr. 30, 1991 307,400 91,600
Apr. 30, 1992 312,590 91,600
IHC’s income statement for its fiscal year ended April 30,
1992, prepared by independent auditors, reports the following:
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Last modified: May 25, 2011