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In addition to the incentive payments, exhibit A to the
supply agreement between Flair Enterprises and B&H committed B&H
to provide Flair Enterprises with Dupont products at 25 percent
off the suggested shop price and 3M products at 35 percent off.
Although most of B&H’s customers receive their discounts as
reductions from their invoiced costs, Flair Enterprises requested
that it be issued monthly rebate checks instead. The amounts
allocated to each Flair Body Works location were reflected on the
checks.
At the direction of Phillip Haney, the rebate checks from
B&H were made payable to Flair Racing, Inc. (Flair Racing),
another operation solely owned by petitioner discussed infra,
instead of to Flair Enterprises. The rebate checks were then
deposited into Flair Racing’s bank account. There is no
reference to Flair Racing in the supply agreement between B&H and
Flair Enterprises. Flair Racing does not purchase any paint
products from B&H. The amounts paid pursuant to the supply
agreement were unrelated to any racing activities in which
petitioners or their family engaged and would have been paid
regardless of petitioners’ involvement in racing. The supply
agreement was not a racing sponsorship by B&H or Dupont.
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Last modified: November 10, 2007