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FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioner
Petitioner lived in Bellerose, New York, when he filed his
petition. Petitioner was Elan’s president. His former spouse
kept Elan’s books and records.
Petitioner had checking, savings, and credit accounts at
Chemical Bank in 1990. He had an American Express card in 1990.
Petitioner and his former spouse were divorced in March
1990. Petitioner did not file a Federal income tax return for
1990.
B. Elan Leather Corp.
Elan was formed in 1984 or 1985. Emile Wahba (Wahba) has
been Elan’s accountant and tax preparer since 1985 or 1986, or
about a year after Elan was incorporated. Wahba prepared and
Elan filed New York City and State corporate income tax returns
for 1985. Petitioner’s former spouse signed the State and city
returns with his approval. On the returns, Elan reported that
petitioner was its only officer and stockholder who owned more
than 5 percent of its issued capital stock and who received any
compensation.
Wahba filed an S corporation election for Elan before 1989.
Wahba prepared Elan’s 1989 Form 1120S, U.S. Income Tax Return for
an S Corporation, which petitioner signed. On it, Elan reported
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Last modified: May 25, 2011