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Activities of the Company During 1992
The company experienced a busy year in 1992. Petitioner had
approximately 100 jobs, with each job lasting anywhere from 6
weeks to 6 months. While petitioner typically maintained a
workforce of approximately 20 to 25 people, during 1992 that
figure increased to 40. Most of the employees served in the
field as installers. Petitioner, a superintendent, an estimator,
and an office manager operated out of the business office.
At some point in 1992, Robert Cook approached petitioner
about working at one of his job sites. Mr. Cook, however,
conditioned his services upon being paid in cash. Due to his
need for labor, petitioner agreed, but only after informing Mr.
Cook that he would be issued a Form 1099 with respect to the cash
payments made to him.
William Baker and Dennis Page were hired by petitioner under
similar circumstances. Petitioner did not meet with these
individuals; rather, he hired them on the recommendation of his
job foremen. Mr. Baker and Mr. Page each insisted on being paid
in cash for their services, a condition to which petitioner again
agreed on the understanding that Forms 1099 would be issued with
regard to the payments.
Petitioner’s arrangements with Messrs. Cook, Baker, and Page
(collectively, the workers) constitute the only instance in which
petitioner paid a worker in cash for services rendered. During
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