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Hendricks did not discuss business matters with petitioner, nor
was petitioner ever an employee of any of Mr. Hendricks’s
businesses.
Mr. Hendricks maintained several separate business bank
accounts to which petitioner had no access. The Hendrickses
maintained only one joint checking account from which petitioner
paid personal and household expenses.
Petitioner completed 2 years of college, where she studied
art. Petitioner did not take any business courses or classes on
income taxation or preparation of income tax returns. After
marrying Mr. Hendricks, petitioner stayed at home to raise their
five children and run their household. Petitioner’s only
involvement in family finances was to pay the monthly household
expenses. Petitioner relied upon Mr. Hendricks for financial,
business, and tax decisions.
The Hendrickses have led frugal lifestyles. There is no
evidence that during the relevant years they made any lavish or
unusual expenditures.
On November 18, 1980, Mr. Hendricks met with the
Hendrickses’ certified public accountant, Kurt Grosser (Mr.
Grosser), and a broker for a partnership called Boulder Oil and
Gas Associates, 1980 (Boulder Oil and Gas). Despite its being
the first he had heard of the partnership, during the meeting Mr.
Hendricks agreed to invest $94,002 in Boulder Oil and Gas and
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