Kent J. and Ruth W. Dawson - Page 3

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          Government consulting, with the law firm of Dawson and Harding in           
          Las Vegas, Nevada.  His wife Ruth Dawson (Mrs. Dawson) is a                 
          teacher and was employed by the Clark County School District                
          during the taxable years at issue.  On their 1983 joint Federal             
          income tax return, petitioners reported gross income of wages,              
          interest, dividends, capital gains, and other sources in the                
          amount of $894,414.  Consequently, in the absence of significant            
          deductions or credits, they would be subject to the payment of a            
          substantial amount of Federal income taxes for 1983.                        
               During 1983, petitioner's law firm experienced a dramatic              
          increase in profits resulting from its participation in                     
          litigation involving a fire at the MGM Hotel.  Petitioner was               
          aware of this windfall early in the year, and sought investments            
          for his income.  After reading an advertisement in a local                  
          newspaper that promised tax sheltered investments with a tax                
          write-off ratio of 4 to 1, petitioner contacted Michael Southard            
          (Southard) of the Mission Company.  At their first meeting,                 
          Southard introduced petitioner to Arthur Geldbach (Geldbach), a             
          self-described specialist in tax sheltered investments and                  
          financial consulting.  Based solely on Southard's recommendation            
          and Geldbach's promotional material, petitioner hired Geldbach to           
          provide him and his law partner Samuel Harding with financial               
          planning services.  For his services, petitioner paid Geldbach an           
          initial fee of $4,000.                                                      






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