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Lake Placid Corporation." However, minutes from meetings on
March 18 and June 11, 1988, make it clear that any future plans
of a reorganization were abandoned when the board decided to
follow the recommendation of Mr. Lotts, FSRC's accountant, and
liquidate in order to benefit from the transitional provisions
for small corporations in the Tax Reform Act of 1986.
Petitioner argues that he did not understand his
accountant's advice. Petitioner contends that he first learned
that Mr. Lotts had treated the transaction as a liquidation upon
receiving his 1988 Federal income tax return for filing.
Petitioner blames this mischaracterization of the transaction on
a lack of effective communication, Mr. Lotts' "urgency to
liquidate", and the fact that Mr. Lotts was unaware of
petitioner's intent to reorganize. However, the record reflects
that petitioner is a well-educated individual who ran a
successful business for many years.
There is nothing in the record, other than petitioner's
self-serving testimony, to indicate that Mr. Lotts did not follow
petitioner's instructions while preparing both his individual and
FSRC's corporate returns. Petitioner did not call Mr. Lotts to
testify about his tax advice or the circumstances surrounding the
preparation of petitioner's individual return or FSRC's corporate
return. Moreover, the record reflects that as early as December
19, 1987, Mr. Lotts advised FSRC's board to liquidate, and that
on June 11, 1988, petitioner signed forms reporting the
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