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In 1977, petitioner began working on a full-time basis for
LPP. She worked in outside sales for approximately 7 years.
Thereafter, until the early 1990s, she was involved in the
management of LPP and was appointed vice president and
secretary/treasurer on February 24, 1992.
Prior to 1977, Julian E. carried on the business of LPP. By
the mid-1980s, however, he had ceased to be actively involved in
day-to-day operations and, essentially, had became a consultant.
LPP never paid him anything for his services that it labeled a
salary. He did, however, draw money out of the corporation to
pay his and his wife’s living expenses as they needed it.
LPP’s Distributions to Julian E. Long Beginning in 1986
During 1986, Julian E., Alma, Julian W., and petitioner
agreed (the 1986 agreement) that, from then on, Julian E. and
Alma would receive a monthly distribution from LPP, initially
fixed at $4,000, but which amount fluctuated thereafter.
During 1993-95 (the last three full years in which Julian E.
was a shareholder in LPP), with the exception of two $5,000
payments in 1995, one to Julian W. and one to petitioner, and one
payment of $14,786 in 1995 on behalf of Julian W. for the
purchase of a boat, the only distributions from LPP to its
shareholders, other than in the form of payments (on their
behalf) of income taxes to either the Internal Revenue Service or
the Louisiana Department of Revenue, were made to Julian E. In
each of 1993 and 1994, Julian E. received twelve $2,000
distributions. In 1995, he received eleven $2,000 distributions
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Last modified: March 27, 2008