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Task’s hiring or marketing. He did not type any reports for
Medi-Task, but he assisted when there were computer problems.
Hawthorne kept Medi-Task’s business records in petitioners’ home
in a file cabinet next to Charlton’s records. She deposited
Medi-Task’s gross receipts in Charter Bank of Houston, and Lake
Buchanan State Bank.
Charlton had access to Medi-Task’s records while he prepared
petitioners’ 1994 return. Hawthorne prepared and gave Charlton
lists that included all but $22,601 of Medi-Task’s income and all
but $2,050 of Medi-Task’s expenses for 1994. She also gave him
bank statements for Medi-Task, Forms 1099, Forms W-2, Wages and
Tax Statement, and documents showing Medi-Task’s expenses.
Charlton received unemployment compensation and VA
disability payments in the last quarter of 1994. Medi-Task was
Charlton’s and Hawthorne’s only other source of income during
that 3-month period.
Petitioners signed a personal financial statement on April
15, 1995, which stated that Medi-Task was worth $110,000.
Hawthorne sold Medi-Task in 1995 without Charlton’s consent or
participation and kept the proceeds.
C. Rental Cabins
Petitioners bought real property in the spring of 1993 at
Charlton Pointe on Lake Buchanan in Llano County, Texas. There
were some rental cabins on the property which were built in the
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Last modified: May 25, 2011