Charles Shaw - Page 6

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          Zhen, Bizhen, Shanghai Shen, and Kuang-Yu Wen were located in               
          China.                                                                      
               2.   Shipping Charges and Customs House Brokers                        
               Petitioner obtained 70 to 75 percent of his merchandise from           
          China.  Petitioner paid shipping charges of $38,682 in 1993,                
          $18,678 in 1994, and $21,401 in 1995 to buy merchandise for Far             
          Eastern to resell.                                                          
               Petitioner was required to file forms with the U.S. Customs            
          Service (Customs Service) when he imported goods to the United              
          States.  He used customs house brokers to prepare and file                  
          documents with the Customs Service on his behalf in the years in            
          issue.  One of the customs house brokers petitioner used was                
          Panalpina, Inc. (Panalpina).  Petitioner also used The Hipage               
          Co., Inc., and Southern Export Services as customs house brokers            
          in 1993.                                                                    
               3.   Petitioner’s Business Expenses                                    
               In 1993-95, petitioner incurred business expenses for                  
          electricity, gas, garbage removal, termite control, telephone,              
          and travel.                                                                 
               Petitioner traveled to China during each of the years in               
          issue to attend craft and trade shows and to identify merchandise           
          that he could sell.  He incurred business travel expenses of                
          $4,188 in 1994.                                                             








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