- 20 -
Petitioner’s Federal income tax returns for 1987, 1988, and
1989, included a Schedule C, Profit or (Loss) From Business or
Profession, for each year relating to “T Scallen Presents”
described as an “entertainment” activity.14 On line 21 of
petitioner’s Form 1040, U.S. Individual Income Tax Return, for
1987, and on line 22 of his Forms 1040 for 1988 and 1989, he
reported the loan guaranty fees that he received from IBC in
those years as “other income”.15 Petitioner’s income tax returns
for years subsequent to 1989 did not include Schedules C for the
“T Scallen Presents” entertainment activity. Instead, the
returns for 1990-1995 contained a Schedule C for an unnamed
business activity described as “lending/financing”.16 On his
returns for those years, petitioner did not claim deductions for
any expenses relating to his receipt of loan guaranty fees from
IBC or any other party. The returns for 1990-94 each included a
14Petitioner’s tax returns for 1987-92 listed his occupation
as “executive”.
15Mr. Estes, who prepared petitioner’s tax returns for those
years, testified that the decision to report the guaranty fee
income on lines 21 or 22 “would have been made by either myself
or one of the persons involved in the preparation of the return”.
Mr. Estes testified that this was done as a matter of convenience
and that it had no affect on the calculation of petitioner’s tax
liability whether the items were reported on Schedules C or lines
21 or 22.
16Petitioner reported the guaranty fee that he received in
1990 from IBC on Schedule C, Profit or (Loss) From Business or
Profession, of his Form 1040, U.S. Individual Income Tax Return,
for that year.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011