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conducting Maple Row’s operations. Mrs. Burrus, who was
responsible for writing checks and preparing the ledger, would
generally obtain information necessary for this purpose from Dr.
Burrus and Mr. Gruen. The ledger recorded the expenditures of
the Maple Row operations, as well as its income, such as from
sales of cattle,5 from the rental of the houses on the Maple Row
properties, and from tobacco allotments. The ledgers also
recorded as “income” certain cash transfers from other bank
accounts controlled by petitioners, including accounts used for
Dr. Burrus’s medical practice and a shopping center owned by
petitioners. At the end of each year, Mrs. Burrus gave the
ledger and checks to petitioners’ accountant. Petitioners’
accountant prepared petitioners’ returns for each of the years in
issue. The accountant would check the ledger against the checks,
and make inquiries of Mrs. Burrus to prepare the returns. During
the years in issue, petitioners did not have financial statements
prepared for Maple Row, nor did they seek advice from any outside
management or agricultural consultant regarding Maple Row.
Petitioners’ accountant did not advise petitioners regarding
5 The entries for cattle sales sometimes specified the
number and gender of the animals sold and sometimes did not.
Where specified, the ledgers in evidence recorded bull sales
ranging from $1,847 to $2,100 per bull, and heifer sales at $850
per heifer.
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Last modified: May 25, 2011