Dennis L. and Margaret J. Knudsen - Page 6




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          Petitioners’ Operational History                                            
               From 1989 through 2001, petitioners acquired around 50 or 60           
          species of birds and approximately 30 different species of other            
          animals for breeding.  From 1989 through 2001, petitioners spent            
          more than $1 million on livestock.4                                         
               Petitioners purchased animals from dealer/brokers and zoos.            
          Before purchasing an animal, petitioners often did not                      
          investigate the quality and breeding possibility of the animal.             
          Mrs. Knudsen purchased two Clydesdale horses without knowing what           
          the selling price of their offspring would be.  She also                    
          purchased breeds that were not suitable for the Kansas climate.             
          In addition, Mrs. Knudsen purchased animals without receiving any           
          health information on them.  For example, petitioners purchased             
          from a zoo a bongo that had an implant, which prevented the                 
          animal from breeding.                                                       
               Petitioners hired employees to help maintain the facilities.           
          Two of petitioners’ children also helped at ERE, although they              
          did not always receive wages.  Petitioners offered their full-              
          time employees health insurance benefits.  Petitioners withheld             
          employment taxes and filed payroll tax returns with the Internal            
          Revenue Service and the State of Kansas.  Petitioners required              




               4During the years at issue, petitioners spent $97,797 on               
          livestock purchases.                                                        






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Last modified: March 27, 2008