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adopted a formal plan of liquidation when it attached false
minutes to its 1988 tax return and did not report income from the
sale of assets to JSL. Respondent argues that the false minutes
are evidence of an actual, intentional wrongdoing for the
specific purpose of evading taxes.
Petitioner argues that the minutes are not evidence of fraud
but evidence of the shareholders' intention to comply with the
tax laws. In support of its position, petitioner addresses the
backdated minutes and argues on brief:
There were inaccuracies in the writing [minutes] which
clearly indicated the plan was prepared after the fact
and back-dated to appear as though it were prepared in
anticipation of the liquidation. This, the
Commissioner argues, is proof not only that no plan
existed, but also of an intent to defraud the
government. More likely it is simply what happens when
a taxpayer attempts to prepare a tax sensitive and very
technical document without benefit of counsel.
Experienced counsel could have easily prepared the plan
without the appearance of fraud by simply dating it
currently and referring to an earlier meeting. The
irony is that the law does not even require a written
plan. All of this trouble arose from the efforts of
one man attempting to properly satisfy what he thought
was required of him under the law.
We cannot accept petitioner's excuse for creation of the
false minutes.
WCWC informed Briggs in December 1989 that ACT would owe a
substantial amount of taxes if ACT had not adopted a plan of
liquidation prior to or on the date of the sale to JSL. Briggs
testified:
Q But they [the accountants] showed you an ACT
return in which there was a lot of tax due.
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