William G. Applegate - Page 4

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          provided to her by Mr. Applegate.  Ms. Wang did not discuss the             
          return with Mr. Applegate.                                                  
               Ms. Wang is a graduate of Purdue University, holding a                 
          degree in engineering.  During taxable year 1999, Ms. Wang was              
          employed as an environmental engineer with Eli Lilly & Co. (Eli             
          Lilly), her employer of 22 years.                                           
               Mr. Applegate is also a graduate of Purdue University,                 
          holding a bachelor of science degree in industrial supervision.             
          During 1999, Mr. Applegate, in his roles as president, secretary,           
          shareholder, and employee of DriAll, Inc. (DriAll), earned                  
          $41,400.  DriAll, a closely held corporation owned by Mr.                   
          Applegate's family, manufactures agricultural equipment and                 
          incinerators.                                                               
               Petitioners maintained joint savings and checking accounts.            
          Ms. Wang's wages from Eli Lilly, as well as checks from DriAll to           
          Mr. Applegate, were deposited into their joint checking account.            
          Ms. Wang had full access to both the joint savings and checking             
          accounts.  She reviewed the monthly bank statements, wrote                  
          checks, and balanced the checkbook.                                         
               DriAll had a reimbursement policy in place during 1999 which           
          covered a variety of expenses.  The reimbursable expenses                   
          included:  (1) Business use of personal vehicles; (2) business              
          travel expenses; (3) meals and entertainment expenses; and (4)              
          general business expenses.                                                  






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