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Although Culnen & Hamilton was an S corporation only until
May 31, 1987, Mr. Levin’s testimony presents a credible
explanation of petitioner’s relationship with Culnen & Hamilton.
Janet Sacklow is a partner in the accounting firm of
Amsterdam, Sacklow & Acox. That firm also did accounting work
for Culnen & Hamilton, including preparing various financial
records and its income tax returns for the years in question.
Ms. Sacklow testified that she treated the Wedgewood payments as
loans to petitioner for purposes of both Culnen & Hamilton’s
books and records and its income tax returns. She testified that
the initial record of the Wedgewood payments was made by Culnen &
Hamilton’s bookkeeper, Beatrice, who would record the Wedgewood
payments on the corporation’s general ledger under the heading
“Wedgewood” (the Wedgewood entries). Beatrice made the Wedgewood
entries monthly. Ms. Sacklow testified that she was responsible
for classifying the Wedgewood entries as loans to petitioner.
She testified that she made that determination based on
conversations with petitioner and because she believed that
Culnen & Hamilton had no association with Wedgewood: “It was
only because of Dan Culnen that the money was coming from that
location [i.e., from Culnen & Hamilton].” The parties have
stipulated a letter dated February 11, 1993, from Ms. Sacklow
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