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testified that, during the audit years, she worked more than 40
hours per week on behalf of petitioner. Her principal
involvement with petitioner consisted of: (1) Attending weekly
board meetings; (2) attending, as a representative of petitioner,
chamber of commerce meetings and various community functions and
events in the cities served by petitioner; and (3) executing her
personal guaranty relating to the line of credit extended to
petitioner by Bank of America. Mrs. Harrison’s other activities,
such as filing and maintaining historic company records, signing
checks presented to her for the payment of bills, and attending
occasional meetings with drivers or other rank and file
employees, were either ministerial in nature or so sporadic as to
justify no more than a small fraction of the payments to her
during the audit years. We will consider each of her three
principal functions in turn.
(1) Weekly Board Meetings
The weekly board meeting discussions covered matters of
importance in the conduct of petitioner’s business, and they
often culminated in a board vote on whether to go ahead with a
proposed transaction. Although Mrs. Harrison, her three sons,
and other witnesses all characterized Mrs. Harrison as the final
arbiter of all major business decisions, it is clear that, under
petitioner’s bylaws, she was one of four members of the board,
each of whom had an equal vote. Thus, Mrs. Harrison possessed no
power to veto a decision agreed to by her sons. What the
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