-6-
Longcrier (the consultants). The Letters were not signed by the
consultants.6 The Letters purported to summarize the terms of a
consulting/employment arrangement with In Touch, including the
amount of compensation and benefits to be paid to the
consultants. Each Letter contained the following statement:
“Payments will be deferred until adequate funding can be
obtained.”7 In Touch provided no other documents to respondent
to substantiate the consulting fees claimed as ordinary and
necessary business expenses and/or as startup expenditures.
With respect to marketing expenses, respondent requested
receipts and invoices, the business purpose of these expenses,
and proof of payment. The only documentation produced by
In Touch in response to this request was a typed list of expenses
without any accompanying receipts or invoices.
With respect to professional fees, respondent requested
detailed invoices for professional services rendered, the dates
of service, and canceled checks or receipts to prove payment. In
Touch submitted typed summaries of the professional fees that
failed to list the date and type of services provided.
6 The record contains no evidence that the Letters were ever
delivered to the consultants.
7 As of the trial date, In Touch had not paid the consulting
fees it accrued as deductible expenses and/or startup
expenditures.
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Last modified: November 10, 2007