Robert D. Grossman, Jr. - Page 41

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               (5) Petitioner’s Misleading Explanations                               
               Petitioner claims that he was merely acting as Betsy’s agent           
          in her administration and oversight of the Sley Corporations and            
          that Betsy gave petitioner instructions on how to carry out his             
          duties.  The extension of petitioner’s argument then, is that               
          petitioner cannot be held responsible for any income that may               
          have been omitted from petitioner’s and Betsy’s joint tax return            
          because petitioner was merely acting under Betsy’s control and              
          direction.  This claim is squarely contradicted by the record.              
               We are not concerned with whether petitioner was Betsy’s               
          agent in the sense that Betsy is bound by, or liable for,                   
          petitioner’s actions.  Our concern is as to petitioner’s                    
          liability for his own actions.  It was petitioner, not Betsy, who           
          hired and supervised Baybrook.  It was petitioner, not Betsy, who           
          directed Baybrook as to Markette’s payment of American Express              
          invoices, knowing that those invoices included numerous charges             
          for petitioner’s and Betsy’s personal benefits.  It was                     
          petitioner, not Betsy, who brought Berger into the picture and              
          who understood that Berger’s limited engagement meant that (in              
          the words of the accountants’ compilation reports that                      
          accompanied the Sley Corporations financial statements) Berger              
          would merely present “information that is the representation of             
          management”.  Petitioner, thus, made and effectuated the                    
          decisions that led to the omission of constructive dividend                 





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