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H “about H’s business from time to time,” but she did not provide
advice to H or other members of the Malone family as to business
or financial matters related to Malone Music. Nor did
petitioners or any member of the Malone family involved with
Malone Music seek professional advice or assistance regarding how
the activity should be operated.
Students secure the services of Malone Music in accordance
with written materials that explain, among other things, the
nature of the services offered, lesson schedules, fee schedules,
payment plans and arrangements, as well as what H and R expect
from their students. A checking account in the names of H, R,
and petitioner was established for Malone Music (Malone Music
checking account). Fees generated by the services offered by
Malone Music are generally due to be paid on a monthly basis.3
Students are required to “make checks payable to [the] instructor
personally.” Cash payments received from the students are paid
directly to H and R. Typically, payments received by H and R are
deposited in the Malone Music checking account.
Initially, the expenses of Malone Music were paid by
petitioner usually with checks drawn on his personal checking
account. After the Malone Music checking account was opened, the
expenses for Malone Music were paid from that account. If there
3 H and R also provide free music lessons to their
siblings, and they barter for their services with those students
who cannot otherwise afford to pay their fees in cash.
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Last modified: May 25, 2011