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At the time he filed the petition in this case, petitioner
(petitioner or Mr. Hudspath), who is legally blind and must rely
on others to read to him, resided in Stephens City, Virginia.
In 1994, petitioner purchased a chiropractic business and
operated it as a sole proprietor. In the mid-1990s, petitioner
changed the form of the business and formed (1) Stephens City
Chiropractic (SCC), a limited liability company, (2) Fair Hollow
Trust, a domestic trust, and (3) Fair Exit Trust, a foreign
trust. Petitioner transferred 90 percent of his interest in SCC
to Fair Hollow Trust and retained a 10-percent interest in SCC.
Petitioner subsequently transferred his interest in Fair Hollow
Trust to Fair Exit Trust.
In August 1996, petitioner formed WIN Enterprise LC (WIN), a
retail sales business. Petitioner transferred 80 percent of his
interest in WIN to Fair Hollow Trust and retained a 10-percent
interest in WIN. A third person (Laurie Eakes) owned the remain-
ing 10-percent interest in WIN.
According to respondent’s records, petitioner was the tax
matters partner for both SCC and WIN. On March 10, 1999, the
Internal Revenue Service (IRS) sent to petitioner as the tax
matters partner of WIN a notice of beginning of administrative
proceeding.1 On April 14, 2000, the IRS sent by certified mail
1Respondent’s records do not disclose when the IRS sent to
petitioner as the tax matters partner of SCC a notice of begin-
(continued...)
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