Robert C. Henry II - Page 4

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          petitioner and Allan.  Allan was not a mortician; however, he had           
          a background in business, and he was responsible for the business           
          operations of the home, which included maintaining the books and            
          records and providing all information necessary to the accountant           
          who prepared petitioner's income tax returns.  The funeral home             
          has never been incorporated as a business entity.                           
               Sometime in 1981 or 1982, Allan developed a drug dependency,           
          and, as petitioner testified, "we had to send him away to                   
          treatment."  At that time, Allan conveyed his interest in the               
          funeral home to petitioner, and petitioner has since been the               
          sole owner of the home.  Upon his return from treatment for his             
          drug addiction, Allan resumed his employment with the funeral               
          home.  At some point in time, Allan resumed his dependency on               
          drugs, unbeknownst to petitioner.                                           
               Petitioner's time and attention were devoted exclusively to            
          conducting funerals and performing other attendant services.  He            
          was not involved in the recordkeeping or business end of the                
          funeral home operation.  He relied on his brother for that,                 
          although he occasionally reviewed the list of people who owed               
          money to the home and directed the issuance of reminder notices             
          to such delinquents.  Allan compiled all the necessary                      
          information upon which the accountant annually prepared                     
          petitioner's income tax returns, which included the operations of           
          the funeral home on Schedule C, Profit or Loss From Business.               





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