Terrell Equipment Company, Inc., et al. - Page 12

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          cooperative with the IRS and gave the IRS access to all of TECO’s           
               Janet credibly testified that she made an honest attempt to            
          come up with the figures listed on the Forms 1099.  Additionally,           
          the parties stipulated that Vernon and Janet intended for the               
          amounts listed on these Forms 1099 to cover the amount of                   
          personal expenses paid for, and withdrawals made by, Vernon out             
          of TECO’s funds.  Furthermore, RA Craddock testified that Vernon            
          stated that he wanted to add the amounts listed on the Forms 1099           
          to his income for the years in issue to make sure that he did not           
          owe any taxes.                                                              
               At trial, respondent asked Janet7 whether she thought she              
          owed any more taxes.  Janet responded:  “There is no way on God’s           
          green earth that I thought I owed any taxes.”  Vernon also                  
          testified that when they filed their tax returns for 1987, 1988,            
          and 1989 he was certain that they had paid more taxes than they             
          owed.  Vernon testified:  “at this time, I was positive that I              
          was overpaying.  I was really proud to pay that amount of tax.”             
               RA Craddock testified that Vernon was forthcoming and did              
          not do anything to hide or cover up issues RA Craddock raised.              
          Having had the opportunity to observe Janet and Vernon at trial,            
          we find that their testimony was honest, forthright, and                    
          credible.  Accordingly, we hold that their testimony does not               

               7  We note that prior to the trial of this case, no                    
          representative of the IRS interviewed Janet.                                

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