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Mohney served as an officer of several corporations in the
Mohney Group. Many others, including petitioner, retained him as
a “consultant”. Pursuant to a general understanding with
Newlands, in his capacity as a “consultant” Mohney actually
exercised the highest executive authority with respect to each of
the corporations. Although he was ultimately accountable to the
trustee, he understood that he had Newlands complete confidence
and managed the companies effectively without supervision.
Mohney submitted no written report of his work to Newlands but
informed him of the progress of the companies under his control
from time to time.
On his individual income tax returns, Forms 1040, Schedule
C, for each of the years 1985 through 1991, Mohney reported his
principal business or profession as consulting and included
payments he received from corporations in the Mohney Group in his
gross receipts for the taxable year. The amounts reported as
consultation income from the Mohney Group for each year are as
follows:
Year Number of Companies Total
1985 2 1$10,894
1986 2 36,823
1987 3 268,389
1988 4 175,917
1989 2 100,863
1990 12 364,448
1991 49 2,706,827
1This figure comes from a schedule prepared by petitioner.
Mohney’s return shows a total of $30,408, which may include
receipts from sources outside the Mohney Group.
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