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Energy Research & Generation, Inc. (ERG) is a corporation
incorporated by Glendon, his wife, Janet Benson, and Burton in
California on January 5, 1967. During the years at issue, ERG
utilized the accrual method of accounting for tax purposes.
ERG is the only company in the world that manufactures
various forms of foam metal and foam metal baffles.7 Duane Walz
and Glendon invented the process known as foam metal which
Glendon then developed into a product. However, Walz was given
sole credit as the inventor in the patent, and on March 23, 1976,
he assigned his patent rights to ERG.
On each of the tax returns filed by ERG for 1988 through
1994, Burton is listed on Schedule E, Compensation of Officers,
as owning 100 percent of the common stock of ERG. Throughout the
years 1988 through 1994, Burton was a director of ERG.
Throughout the years 1988 through 1994, ERG maintained a money
market account with Merrill Lynch Pierce, Fenner & Smith, Inc.,
account No. 280-07888-2 (ERG’s bank account).
New Process Industries, Inc. (NPI) was originally
incorporated in Minnesota in 1922 by Burton and Glendon’s father
under the name New Process Laundries, Inc. On January 6, 1967,
the name was changed to NPI. During the years at issue, NPI
7Foam metal baffles are used in the U.S. Navy’s fleet of
ballistic missiles.
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Last modified: May 25, 2011