Orion Contracting Trust, Kevin Peter Carmel, General Manager - Page 5

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          for 1996, 1997, or 1998.  Petitioner did not file any Forms 941,            
          Employer’s Quarterly Federal Tax Return, for any periods in 1996,           
          1997, or 1998 with the IRS with respect to these workers, nor did           
          petitioner file any Forms 940, Employer’s Annual Federal                    
          Unemployment Tax Return, for 1996, 1997, or 1998.  Finally,                 
          petitioner did not file any Forms 1041, U.S. Income Tax Return              
          for Estates and Trusts, for 1996, 1997, or 1998.                            
               Respondent’s examination of petitioner was itself a product            
          of the income tax examinations of petitioner’s managers, Carmel             
          and Damigos, when they both failed to file income tax returns for           
          the 1996 and 1997 tax years.  As part of the examination of                 
          Carmel and Damigos, respondent requested that petitioner make its           
          books and records available for inspection.  When petitioner                
          failed to provide respondent with any documents, respondent                 
          summoned the records from the banks of both Carmel and                      
          petitioner.  Petitioner filed a motion to quash the summons.                
          This motion was later dismissed, and the bank records were                  
          produced to respondent.                                                     
               After respondent received petitioner’s records from the                
          banks, petitioner was referred within the IRS for an employment             
          tax examination.  A notice of examination was sent to petitioner            
          on November 26, 2001, informing it of the examination and                   
          requesting that petitioner make certain documents related to                
          petitioner’s business and workers available for inspection.  This           






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