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October 11, 1989, summarizing previous discussions between Briggs
and Shepard on the treatment of the funds that ACT received from
JSL as a result of the sale. The memorandum did not mention
liquidation. In December 1989, WCWC began preparing ACT's 1988
Form 1120 tax return. WCWC was operating under the assumption
that ACT had not liquidated. After WCWC prepared a draft of
ACT's return, WCWC informed Briggs that a substantial tax
liability would be owed on the funds received from the JSL sale.
Briggs was angry about ACT's tax liability and expressed his
anger to WCWC. In response, J. Vern Williams (Williams), a
manager at WCWC, contacted Turner and asked Turner to get
involved with the ACT tax return. WCWC removed Shepard from
working with ACT and asked Shepard to resign. In a memorandum
dated December 18, 1989, Turner informed Williams that Turner had
previously advised ACT to liquidate. Turner was referring to the
October 27, 1988, memorandum that he had prepared for the ACT
shareholders while they were in Colorado. Turner sent Williams a
copy of the 1988 memorandum that he had prepared for the ACT
shareholders.
Turner prepared a December 18, 1989, memorandum to ACT in
anticipation of a meeting between Turner and Briggs later that
day. In the December 18, 1989, memorandum to ACT, Turner stated:
"We recommended a liquidation of the corporation by January 31,
1989, to qualify for the transitional rules pertaining to a tax
free liquidation under 'old code section 337'." During the
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