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McCulloch. The supplies were sent to McCulloch’s plant in Mexico
where parts were assembled. The parts were later shipped back to
the United States where end products were assembled.
Petitioner’s duties at QSN included overseeing the delivery of
QSN’s screws and nuts to McCulloch. During 1997, petitioner
traveled to Mexico approximately once a week. Petitioner also
managed nine Mexican national employees in Mexico.
Petitioner testified that QSN received a 9-percent
management fee based upon the delivery of screws and nuts to
McCulloch’s plant in Mexico and the parts shipped back to the
United States for assembly. Petitioner testified that any taxes
or fees paid to the Mexican taxing authorities were paid by
petitioner from the 9-percent management fee. No contracts or
agreements between QSN and McCulloch were introduced at trial.
During the year in issue, petitioner was a salaried employee
of QSN. In addition to his regular salary, petitioner stipulated
that he received a monthly car allowance of $400, totaling $4,800
during 1997. Petitioner also stipulated that he received a
monthly check from QSN of $2,000, totaling $24,000 during 1997.
Petitioner does not dispute that he deposited the $400 monthly
car allowance and $2,000 monthly check into his personal checking
account at DM-Federal Credit Union.
Both the $400 monthly car allowance and $2,000 monthly check
were prepared by Ms. Jacqueline S. Udell (Ms. Udell) at QSN’s
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