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Lebasi, N.V. (Lebasi). Linda Parks (Parks) of C&L Orlando
prepared and signed the MSI 1988 return. It was also signed by
Sans. At the time she prepared the return, Parks was aware of
the Form 5472 requirement but did not know that the franchise fee
was being paid to a related party.
B. MANV/MDT
The MANV/MDT Federal tax returns for fiscal years ended
November 30, 1987 through 1990, were prepared by the Los Angeles
C&L office. Statements attached to the returns indicated that
MANV transferred its assets to MABV and that MABV transferred its
assets to MDT, in section 351 transactions for stock and
securities. The statements included information that MABV had
assumed all of the liabilities of MANV.
MANV/MDT reported the following on its Federal tax returns:
Royalties/
FYE Gross Total Taxable Franchise
Nov. 30 Receipts Income Income Payments
1987 $14,409,710 $10,601,670 $4,347,581 $1,441,924
1988 18,665,675 13,836,206 1,183,497 3,719,321
1989 21,278,643 15,537,012 1,054 389 5,148,541
1990 31,251,794 22,688,216 5,563,637 2,975,726
12/31 Calendar Year:
1990 2,367,034 1,730,776 442,963 248,004
1991 34,793,808 24,047,269 2,817,007 4,396,287
Additionally, petitioners MANV/MDT claimed deductions for
payments it made as management and consulting fees in the amounts
of:
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