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regarding the marketing of any potential product created pursuant
to the Research Agreement. There was no funding within the
partnership for the marketing of any computer software product
that might have been produced, and no marketing occurred.
Knox never provided the partnership with the completed
computer software product. The partnership never maintained any
office. The partnership never operated a trade or business. The
partnership received no income from sales of computer software.
During the years in issue, Knox wrote checks to various
partners and related persons and entities for “research” or
“consulting”. For 1982, the partnership sent a Form 1099-MISC to
Knox, reporting $4,000 paid for research. Knox sent a
Form 1099-MISC to Montelius, reporting $500 paid for research.
For 1983, the partnership sent a Form 1099-MISC to Knox,
reporting $71,136 paid for research, and Knox sent Forms
1099-MISC to Montelius and to Michael V. Jensen (Jensen),
reporting $17,804 and $17,691, respectively. For 1984, the
partnership sent to Knox a Form 1099-MISC, reporting payment of
$29,450. Knox issued Forms 1099-MISC to Wayne E. Brickey for
$5,453, Montelius for $6,000, and Jensen for $7,374.
In an undated report to limited partners, the following
accounting summary was set forth:
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Last modified: May 25, 2011