Trans World Travel - Page 3




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               Petitioner’s officers and shareholders are two brothers,               
          James M. Gibbs (James) and John W. Gibbs (John).  James and John            
          each own 50 percent of petitioner’s stock.  James is petitioner’s           
          vice president and secretary, and John is petitioner’s president            
          and treasurer.  James is primarily responsible for                          
          administrative, financial and tax matters, and his duties include           
          running the office and dealing with the accountants.  In                    
          contrast, John is primarily responsible for sales and promotion.            
          James and John each attended college for 2 years.                           
               Other than James and John, petitioner employs approximately            
          8 to 10 individuals.  None of these individuals exercises any               
          managerial responsibility; rather, these individuals perform only           
          clerical and sales-related duties.                                          
               Both James and John spend much of their time traveling on              
          business.  John in particular spends between 30 to 50 percent of            
          his time traveling, both domestically and internationally.                  
          Although James travels less frequently than John, some of his               
          destinations are also outside of the United States.                         
          B. Steven Jaffe and the Firm of Coleman, Joseph & Jaffe                     
               Neither James nor John, nor any of petitioner’s other                  
          employees, possessed any expertise in either accounting or                  
          Federal tax matters.  Accordingly, from 1991 through 1998,                  
          petitioner retained the accounting and consulting firm of                   
          Coleman, Joseph & Jaffe (CJ&J) to provide both accounting and tax           






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