Court Opinion

ID: 4340949
Source: CourtListenerOpinion
Date Created: 2018-11-14 08:50:08.420754+00
Date Added: 2024-06-11T14:48:50.621591
License: Public Domain

T.C. Memo. 2018-2

                         UNITED STATES TAX COURT

               JOAN FARR f.k.a. JOAN HEFFINGTON, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent

      Docket No. 2746-15.                           Filed January 9, 2018.

      Joan Farr f.k.a. Joan Heffington, pro se.

      Patrick A. Greenleaf, for respondent.

              MEMORANDUM FINDINGS OF FACT AND OPINION

      CHIECHI, Judge: Respondent determined the following deficiencies in

petitioner’s Federal excise taxes under section 4958(a)(1) and (b)1 for the years

indicated:

      1
       All section references are to the Internal Revenue Code (Code) in effect for
2010, 2011, and 2012, the years at issue. All Rule references are to the Tax Court
Rules of Practice and Procedure.
                                         -2-

[*2]               Year          Sec. 4958(a)(1)           Sec. 4958(b)
                  2010              $1,740.94              $13,927.52
                  2011               6,808.13               54,465.06
                  2012              1,324.76                10,598.10

                                FINDINGS OF FACT

       Virtually all of the facts have been deemed established pursuant to Rule

91(f)(3).

       Petitioner resided in Kansas at the time she filed the petition.

       At all relevant times, including during 2010, 2011, and 2012, petitioner was

the chief executive officer and a member of the board of directors of the Associa-

tion for Honest Attorneys (AHA). Any work that petitioner did for AHA during

2010, 2011, and 2012 was done at her residence.

       Petitioner had organized AHA in 2003 as a nonprofit corporation under the

laws of the State of Kansas. During that year, petitioner also prepared and filed on

behalf of AHA an application with the Internal Revenue Service (IRS) for a

determination that it qualified as an organization described in section 501(c)(3)

that was exempt from Federal income tax (tax). The IRS granted that application

and made that determination.
                                         -3-

[*3] For each of the years 2010, 2011, and 2012, AHA filed with the IRS Form

990-N (e-Postcard), in which it reported that (1) it continued to operate as a tax-

exempt organization described in section 501(c)(3); (2) petitioner was its principal

officer; and (3) its annual gross receipts were less than $50,000.

      AHA did not file for any of the years 2010, 2011, and 2012 Form 990-PF,

Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust

Treated as Private Foundation (Form 990-PF), which must be filed annually by

every private foundation or section 4947(a)(1) trust that is treated as a private

foundation, regardless of its revenues or assets.2 Nor did AHA file for any of the

years 2010, 2011, and 2012 Form 4720, Return of Certain Excise Taxes Under

Chapters 41 and 42 of the Internal Revenue Code (Form 4720), which must be

filed by every private foundation or section 4947(a)(1) trust that is treated as a

private foundation in the event certain excise taxes under chapters 41 and 42 of the

Code are incurred.

      AHA filed a petition in the Court for a declaratory judgment under section

7428 with respect to a notice of determination that respondent had issued to it on

February 3, 2015, thereby commencing the case at docket No. 14562-15X. In that

      2
       We have taken judicial notice of certain facts regarding certain IRS forms
and/or certain IRS instructions with respect to certain IRS forms.
                                        -4-

[*4] notice, respondent determined to revoke, effective January 1, 2010, AHA’s

exemption from tax under section 501(a) because respondent had determined that

AHA “ha[d] not operated in accordance with the provisions of section 501(c)(3)”.3

      During 2010, 2011, and 2012, AHA maintained a checking account at Verus

Bank in Derby, Kansas (AHA checking account). During those years, petitioner

had exclusive signature authority for that checking account.

      During 2010, 2011, and 2012, petitioner used the AHA checking account to

make certain purchases from certain third parties and certain cash withdrawals

totaling $6,963.76, $27,232.53, and $5,299.05, respectively.4 Specifically,

petitioner used the AHA checking account in 2010, 2011, and 2012 to make

certain purchases from certain department stores and grocery stores, such as

Dillard’s, Walmart, Kwik Shop, Kohl’s, Walgreens, and Dillons. In addition,

petitioner used the AHA checking account in 2010, 2011, and 2012 to make

automobile-related purchases, such as QuikTrip, A&A Auto Salvage, Derby Quick

      3
      We have taken judicial notice of certain facts relating to the notice of
determination issued to AHA on which the declaratory judgment proceeding that
AHA commenced in the case at docket No. 14562-15X is based.
      4
       Attached as an appendix are tables that set forth all of the purchases from
third parties that petitioner made with checks drawn on, and all of the cash
withdrawals that she made from, the AHA checking account totaling $6,963.76,
$27,232.53, and $5,299.05 during 2010, 2011, and 2012, respectively.
                                        -5-

[*5] Lube, K-15 Auto Salvage, and Meineke. Petitioner also used the AHA

checking account in 2010, 2011, and 2012 to make certain home-related and real-

estate-related purchases from certain stores, such as Slumberland, Westar Energy,

Lowes, T&S Tree Service, Gene’s Stump Grinding Service, Dutch’s, Echostar

Dish, Allstate, Roberts Overdoors Inc., Lusco Brick & Stone, MY Construction,

and Star Lumber & Supply. In addition, petitioner used the AHA checking

account in 2010 and 2011 to make certain payments with respect to a USAA credit

card. Petitioner also used the AHA checking account in 2011 to make a $189.50

payment to an animal clinic and a $7,750 payment to St. John’s Military School

for tuition for her son, and another $100 payment to that school. In addition,

petitioner used the AHA checking account in 2011 to pay $2,200 for the exhuma-

tion and DNA testing of her father’s remains.

      Although petitioner used the AHA checking account during 2010, 2011, and

2012 to make certain purchases from certain third parties and certain cash with-

drawals totaling $6,963.76, $27,232.53, and $5,299.05, respectively, she did not

report any income from AHA in the individual tax return that she filed for each of

those years.

      AHA did not pay petitioner a salary during any of the years 2010 through

2012. Nor did AHA issue to petitioner Form W-2, Wage and Tax Statement, or
                                           -6-

[*6] any type of Form 1099 for any of those years. In addition, AHA did not file

any Forms 941, Employer’s Quarterly Federal Tax Return (Forms 941), or any

Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return (Form

940), for any of the years 2010, 2011, and 2012 or for any periods within any of

those years. During the period 2003 through 2012, AHA did not execute any

promissory notes payable to petitioner and did not make any payments of interest

to her.

          Respondent issued to petitioner a notice of deficiency (notice) for her

taxable years 2010, 2011, and 2012. In that notice, respondent determined, inter

alia, that during those taxable years petitioner, a so-called disqualified person, had

engaged in certain excess benefit transactions with AHA under section 4958

totaling $6,963.76, $27,232.53, and $5,299.05, respectively.

                                        OPINION

          We must decide whether to sustain respondent’s determinations in the

notice. Petitioner has the burden of establishing that those determinations are

erroneous.5 See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).

          5
        Sec. 7491(a) is inapplicable because it does not apply to taxes imposed by
subtitle D of the Code, such as the taxes under sec. 4958 that are at issue here.
                                          -7-

[*7] Before deciding whether to sustain respondent’s determinations in the

notice, we summarize the statutory framework within which we must make that

decision. Section 4958(a)(1) imposes on each “excess benefit transaction” a so-

called first-tier “tax equal to 25 percent of the excess benefit.” The first-tier tax is

required to be paid by any disqualified person, as defined in section 4958(f)(1),

with respect to that excess benefit transaction. See sec. 4958(a)(1).

      Section 4958(c)(1)(A) defines the term “excess benefit transaction” to mean

generally “any transaction in which an economic benefit is provided by an applica-

ble tax-exempt organization directly or indirectly to or for the use of any disquali-

fied person if the value of the economic benefit provided exceeds the value of the

consideration (including the performance of services) received for providing such

benefit.” The term “excess benefit” means the excess referred to in section

4958(c)(1)(A).

      As pertinent here, section 4958(f)(1)(A) defines the term “disqualified

person” to mean with respect to any transaction, inter alia, “any person who was,

at any time during the 5-year period ending on the date of such transaction, in a

position to exercise substantial influence over the affairs of the organization”.

      Section 4958(e) defines the term “applicable tax-exempt organization” in

pertinent part to mean--
                                         -8-

[*8]         (1) any organization which (without regard to any excess
       benefit) would be described in paragraph (3) * * * of section 501(c)
       and exempt from tax under section 501(a), and

              (2) any organization which was described in * * * [section
       4958(e)(1)] at any time during the 5-year period ending on the date of
       the transaction.[6]

       Section 4958(b) imposes a so-called second-tier “tax equal to 200 percent of

the excess benefit involved.” The second-tier tax will be imposed “[i]n any case in

which an initial [first-tier] tax is imposed by * * * [section 4958] (a)(1) on an

excess benefit transaction and the excess benefit involved in such transaction is

not corrected within the taxable period”. The second-tier tax imposed by section

4958(b) is required to be paid by any disqualified person, as defined in section

4958(f)(1), with respect to that excess benefit transaction.

       Section 4958(f)(6) defines the terms “correction” and “correct” for purposes

of the second-tier tax imposed by section 4958(b) to mean,

       with respect to any excess benefit transaction, undoing the excess
       benefit to the extent possible, and taking any additional measures
       necessary to place the organization in a financial position not worse
       than that in which it would be if the disqualified person were dealing
       under the highest fiduciary standards * * *

       6
      The term “applicable tax-exempt organization”does not include a private
foundation, as defined in sec. 509(a).
                                        -9-

[*9] Section 4958(f)(5) defines the term “taxable period” for purposes of the

second-tier tax imposed by section 4958(b) to mean,

            with respect to any excess benefit transaction, the period
      beginning with the date on which the transaction occurs and ending
      on the earliest of--

                   (A) the date of mailing a notice of deficiency under
             section 6212 with respect to the tax imposed by * * * [section
             4958] (a)(1), or

                   (B) the date on which the tax imposed by * * * [section
             4958] (a)(1) is assessed.

      We turn now to whether to sustain respondent’s determinations in the

notice. In doing so, we must decide (1) whether AHA is an applicable tax-exempt

organization, as defined in section 4958(e); (2) whether petitioner is a disqualified

person with respect to AHA, as defined in section 4958(f)(1)(A); (3) whether

during each of her taxable years 2010, 2011, and 2012 petitioner engaged in

excess benefit transactions with AHA, as defined in section 4958(c)(1)(A),

totaling $6,963.76, $27,232.53, and $5,299.05, respectively; and (4) whether

petitioner corrected the excess benefits involved in those respective excess benefit

transactions within the taxable period, as defined in section 4958(f)(5).
                                         - 10 -

[*10] First-Tier Tax Under Section 4958(a)(1)

      Applicable Tax-Exempt Organization

      In 2003, petitioner prepared and filed on behalf of AHA an application with

the IRS for a determination that it qualified as an organization described in section

501(c)(3) that was exempt from tax. The IRS granted that application and made

that determination.

      For each of the years 2010, 2011, and 2012, AHA filed with the IRS Form

990-N (e-Postcard), in which it reported that (1) it continued to operate as a tax-

exempt organization described in section 501(c)(3); (2) petitioner was its principal

officer; and (3) its annual gross receipts were less than $50,000.

      AHA did not file for any of the years 2010, 2011, and 2012 Form 990-PF,

which must be filed annually by every private foundation or section 4947(a)(1)

trust that is treated as a private foundation, regardless of its revenues or assets.

Nor did AHA file for any of those years Form 4720, which must be filed by every

private foundation or section 4947(a)(1) trust that is treated as a private foundation

in the event certain excise taxes under chapters 41 and 42 of the Code are in-

curred.

      AHA filed a petition in the Court for a declaratory judgment under section

7428 with respect to a notice of determination that respondent had issued to it on
                                       - 11 -

[*11] February 3, 2015, thereby commencing the case at docket No. 14562-15X.

In that notice, respondent determined to revoke, effective January 1, 2010, AHA’s

exemption from tax under section 501(a) because respondent had determined that

AHA “ha[d] not operated in accordance with the provisions of section 501(c)(3)”.

      Petitioner does not dispute respondent’s determinations in the notice that

during each of the years 2010, 2011, and 2012 AHA was an applicable tax-exempt

organization, as defined in section 4958(e).

      On the record before us, we find that throughout the period commencing

with its inception in 2003 though December 31, 2009, the IRS treated AHA as an

organization described in section 501(c)(3) that was exempt from tax. On that

record, we further find that during each of the years 2010, 2011, and 2012 AHA

was an applicable tax-exempt organization, as defined in section 4958(e).

      Disqualified Person

      During 2010, 2011, and 2012, petitioner was the chief executive officer and

a member of the board of directors of AHA. During those years, she had exclusive

signature authority for the AHA checking account at Verus Bank.

      Petitioner does not dispute respondent’s determinations in the notice that

during each of the years 2010, 2011, and 2012 she was a disqualified person with

respect to AHA, as defined in section 4958(f)(1)(A).
                                        - 12 -

[*12] On the record before us, we find that during each of the years 2010, 2011,

and 2012, petitioner was in a position to exercise substantial influence over the

affairs of AHA. See sec. 53.4958-3(c)(1) to (3), Foundation Excise Tax Regs.

(persons deemed to have substantial influence over an organization include voting

members of the governing body, presidents, chief executive officers, and treasur-

ers). On that record, we further find that during each of those years petitioner was

a disqualified person with respect to AHA, as defined in section 4958(f)(1)(A).

      Excess Benefit Transactions

      During 2010, 2011, and 2012, petitioner used the AHA checking account to

make certain purchases from certain third parties and certain cash withdrawals

totaling $6,963.76, $27,232.53, and $5,299.05, respectively.7 Petitioner disputes

respondent’s determinations in the notice that those purchases and those cash

withdrawals are excess benefit transactions, as defined in section 4958(c)(1)(A).

In support of her position, petitioner advances the following three contentions:

(1) each of the payments to third parties for the purchases at issue was for a

business or an exempt purpose of AHA; (2) each of those payments and each of

the cash withdrawals at issue constituted compensation that AHA owed petitioner

for services that she had rendered for AHA during years prior to 2010; and/or

      7
          See supra note 4.
                                        - 13 -

[*13] (3) each of the payments at issue and each of the cash withdrawals at issue

represented the repayment by AHA of certain loans that petitioner had made to

AHA during years prior to 2010.

      In support of the contentions that petitioner advances in support of her

position, she relies on her testimony and certain documentary evidence. With

respect to petitioner’s testimony on which she relies, we found her testimony to be

general, conclusory, vague, self-serving, uncorroborated, and/or not credible in

certain material respects. We are not required to, and we shall not, rely on peti-

tioner’s testimony to establish her position or any of the contentions that she

advances in support of her position that none of the purchases from certain third

parties and certain cash withdrawals totaling $6,963.76, $27,232.53, and

$5,299.05, respectively, that she made during 2010, 2011, and 2012 is an excess

benefit transaction, as defined in section 4958(c)(1)(A). See, e.g., Tokarski v.

Commissioner, 87 T.C. 74, 77 (1986).

      With respect to certain documentary evidence on which petitioner relies, we

found that evidence to be questionable, not reliable, not credible, and/or otherwise

not persuasive.8 We are not required to, and we shall not, rely on any such

      8
        Petitioner prepared at least some of the documentary evidence on which
she relies after respondent began an examination of her taxable years 2010, 2011,
                                                                      (continued...)
                                        - 14 -

[*14] documentary evidence to establish petitioner’s position or any of the

contentions that she advances in support of her position that none of the purchases

from certain third parties and certain cash withdrawals totaling $6,963.76,

$27,232.53, and $5,299.05, respectively, that she made during 2010, 2011, and

2012 is an excess benefit transaction, as defined in section 4958(c)(1)(A).

      On the record before us, we find that petitioner has failed to carry her

burden of establishing that none of the purchases from certain third parties and

certain cash withdrawals totaling $6,963.76, $27,232.53, and $5,299.05, respec-

tively, that she made during 2010, 2011, and 2012 is an excess benefit transaction,

as defined in section 4958(c)(1)(A).

      Based upon our examination of the entire record before us, we find that

petitioner has failed to carry her burden of establishing error in respondent’s deter-

minations in the notice that there are deficiencies of $1,740.94, $6,808.13, and

$1,324.79 under section 4958(a)(1) for her taxable years 2010, 2011, and 2012,

respectively.

      8
      (...continued)
and 2012.
                                        - 15 -

[*15] Second-Tier Tax Under Section 4958(b)

      Petitioner does not dispute that she has not “corrected within the taxable

period” the “excess benefit involved in” each excess benefit transaction, see sec.

4958(b), in which respondent determined she engaged during each of the years

2010, 2011, and 2012 and as a result of which respondent determined a deficiency

under section 4958(a)(1) for each of those years that we have sustained. We

presume that petitioner does not dispute those matters because it is her position

that she did not engage in any excess benefit transaction with AHA during 2010,

2011, or 2012.

      On the record before us, we find that petitioner has not corrected within the

taxable period the excess benefit involved in each excess benefit transaction in

which respondent determined she engaged during each of the years 2010, 2011,

and 2012 and as a result of which respondent determined a deficiency under

section 4958(a)(1) for each of those years that we have sustained.

      Based upon our examination of the entire record before us, we find that

petitioner has failed to carry her burden of establishing error in respondent’s deter-

minations in the notice that there are deficiencies of $13,927.52, $54,465.06, and

$10,598.10 under section 4958(b) for her taxable years 2010, 2011, and 2012,

respectively.
                                  - 16 -

[*16] To reflect the foregoing,

                                                 Decision will be entered for

                                           respondent.
                                     - 17 -

[*17]                          APPENDIX

          Checks Drawn on AHA’s Checking Account During 2010
               Checks Used for Petitioner’s Personal Expenses
        Date of Check    Check No.             Payee        Amount
            1/4/10         1470         Dillards                $119.80
            1/7/10         1471         QuikTrip                  39.40
            1/6/10         1473         Cingular Wireless         26.70
           1/13/10         1474         A&A Auto Salvage         134.94
           1/14/10         1476         Allstate                 368.44
           1/14/10         1478         Dr. Scott Landes          24.00
           1/14/10         1481         Dillons                  162.40
           1/14/10         1482         Dillons                   39.80
           1/19/10         1488         Hollister                 69.10
           1/21/10         1493         QuikTrip                  41.71
           1/28/10         1497         Dillons                   21.00
           1/27/10         1500         Kountry Kupboard          10.42
           2/10/10         1501         Gary Shawalter           150.00
            2/2/10         1502         Kwik Shop                 53.20
            2/8/10         1504         Dillons                   32.80
            2/9/10         1505         Kwik Shop                 45.40
           2/11/10         1506         Dillons                   60.53
           2/18/10         1508         QuikTrip                  39.81
           2/16/10         1509         WalMart                   21.37
                                       - 18 -

[*18]   Date of Check      Check No.             Payee          Amount
           2/19/10            1510        Derby Quick Lube        34.37
           2/19/10            1511        WalMart                 16.35
           2/19/10            1512        Kwik Shop               42.64
            3/1/10            1514        USAA Credit Card        29.90
           3/15/10            1515        Dillons                 35.20
           3/15/10            1517        Rods                    30.00
           3/17/10            1518        WalMart                 41.48
            Total                                               1,690.76
                    Checks Used To Obtain Cash for Petitioner
        Date of Check      Check No.             Payee          Amount
           1/11/10            1480        Verus Bank            $300.00
           2/19/10            1513        Verus Bank            4,900.00
           3/18/10            1519        Verus Bank              40.00
           4/16/10            1520        Joan Heffington         33.00
            Total                                               5,273.00
             Grand total                                        6,963.76
                                    - 19 -

[*19]      Checks Drawn on AHA’s Checking Account During 2011
                Checks Used for Petitioner’s Personal Expenses
        Date of Check   Check No.               Payee            Amount
           6/20/11         1522       Dillons                     $10.12
           6/24/11         1523       Stamps & Misc                65.37
            7/9/11         1524       QuikTrip                     34.08
           8/10/11          ---       Westar Energy               112.42
           8/16/11         1530       WalMart                      90.25
           8/15/11         1533       Improv                      100.00
           8/18/11         1534       Slumberland                 339.07
           8/17/11         1535       DRC                          30.00
           8/22/11         1537       WalMart                     118.66
           8/22/11         1538       WalMart                      41.28
           8/19/11         1539       Penny’s                      31.00
           8/23/11         1540       WalMart                      71.25
           8/23/11         1541       Walgreens                      9.12
           8/24/11         1542       QuikTrip                     76.08
            8/4/11         1543       Dillons                      30.00
           8/25/11         1544       WalMart                     315.96
           8/24/11         1545       USAA Credit Card            399.11
           8/30/11         1547       QuikTrip                     59.61
           8/26/11         1548       St. John’s Military
                                       School                    7,750.00
                                    - 20 -

[*20]   Date of Check   Check No.               Payee       Amount
           8/30/11        1550        T&S Tree Service       350.00
           8/30/11        1551        Gene’s Stump
                                       Grinding Service       50.00
            9/2/11        1552        Dillons                 50.00
            9/8/11        1553        El Paso Animal
                                       Clinic                189.50
           9/13/11        1554        WalMart                 22.11
           9/10/11        1555        Dutch’s                251.06
           9/10/11        1556        Great Clips             35.87
           9/19/11        1557        WalMart                100.91
           9/20/11        1559        WalMart                 34.01
           9/20/11        1561        Kohls                   31.25
           9/19/11        1562        Hollister               65.87
           10/2/11        1564        Rollins                900.00
          10/12/11        1565        Echostar Dish           50.43
           10/6/11        1566        Ryan Lawn & Tree       175.08
           10/8/11        1568        Lowes                  117.35
          10/13/11        1570        WalMart                 27.77
          10/11/11        1571        Sedgwick Co.
                                       Treasurer             485.10
          10/14/11        1572        Meineke Car Care       393.66
          10/15/11        1573        St. John’s Military
                                       School                100.00
          10/18/11        1574        WalMart                 31.33
                                      - 21 -

[*21]   Date of Check     Check No.               Payee          Amount
          10/19/11           1575       Central Mississippi
                                         Crematory, Inc.             35.00
          10/19/11           1601       Medscreens, Inc.          1,300.00
           11/3/11           1602       Dillons                      50.00
           11/8/11            ---       Perfect Memorials            17.95
          11/18/11            ---       Joel Osteen                 18.00
           11/1/11            ---       Subway                       11.05
           11/7/11           1604       Dillons                      72.36
          11/10/11           1607       Penny’s                     96.56
          11/11/11           1609       Dish                        50.43
          11/15/11           1612       K-15 Auto Salvage           30.00
          11/15/11           1613       WalMart                     78.23
          12/13/11           1615       Lowes                       59.30
          12/28/11            ---       O’reilly Auto               17.24
          12/16/11            ---       Braums                      10.80
          12/23/11           1617       AT&T Solutions              40.00
             ---             1618       Lowes                        26.93
            Total                                                15,058.53
                    Checks Used To Obtain Cash for Petitioner
        Date of Check     Check No.               Payee          Amount
            8/4/11            ---       Verus Bank              $10,350.00
            8/8/11           1526       Joan Heffington            300.00
           8/11/11           1529       Cash                       100.00
                                        - 22 -

[*22]   Date of Check       Check No.            Payee      Amount
           8/15/11            1532        Joan Heffington     200.00
           8/17/11            1536        Joan Heffington     150.00
           8/26/11            1549        Joan Heffington     234.00
           9/19/11            1560        Joan Heffington     420.00
           3/18/10            1567        Joan Heffington     420.00
            Total                                           12,174.00
              Grand total                                   27,232.53
                                      - 23 -

[*23]      Checks Drawn on AHA’s Checking Account During 2012
               Checks Used for Petitioner’s Personal Expenses
        Date of Check     Check No.             Payee           Amount
            1/5/12            ---       Motor Mint Cars          $19.90
           1/13/12           1619       My Construction         1,050.00
           1/17/12           1621       Roberts Overdoors,
                                         Inc.                   1,610.53
           1/18/12           1623       Lusco Brick &
                                         Stone                   526.53
           1/19/12           1624       Star Lumber &
                                         Supply                 1,251.98
           1/25/12           1625       Dillons                   44.00
           1/27/12           1626       Lowes                     38.60
           2/14/12            ---       QuikTrip                  20.00
           2/15/12           1630       WalMart                  183.51
           9/10/12            ---       QuikTrip                    9.00
           9/12/12            ---       Kwik Shop                   5.00
            Total                                               4,759.05
                    Checks Used To Obtain Cash for Petitioner
        Date of Check     Check No.             Payee           Amount
           1/24/12            ---       Cash                    $120.00
           1/30/12           1628       Joan Heffington          220.00
           2/12/12            ---       Cash                      60.00
            2/9/12           1629       Joan Heffington           70.00
            8/7/12            ---       Joan Heffington           20.00
                                       - 24 -

[*24]   Date of Check      Check No.            Payee        Amount
            9/7/12            ---        Cash from deposit
                                          slip                  10.00
          10/15/12            ---        Joan Heffington        40.00
            Total                                             540.00
             Grand total                                     5,299.05