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Babbitt. Abramson and Bachmann previously had worked together at
Clarence Rainess & Co., Certified Public Accountants. Joseph
Greene (Greene) was a partner at Bachmann, Schwartz for a time
during the early 1980's. Bachmann, Schwartz specialized in
accounting for the garment industry. The firm performed auditing
services, reviewed investment opportunities, and advised clients
in business and estate planning, as well as mergers and
acquisitions. For time spent researching investment
opportunities, such as Plymouth and Scarborough, Bachmann,
Schwartz generally received a 5-percent commission on sales of
investments. In these cases, Bachmann, Schwartz received a 10-
percent commission for placing the Partnership shares with
petitioners.5
Abramson generally was responsible for advising clients on
tax matters and for reviewing all tax returns before they were
5 The Plymouth and Scarborough offering memoranda both state
that the partnerships will pay sales commissions and fees to
offeree representatives in amounts equal to 10 percent of the
price paid by the investors represented by such persons. The
offering memoranda further state that if such fees are not paid
"they will either be retained by the general partner as
additional compensation if permitted by applicable state law, or
applied in reduction of the subscription price." The K-1's for
petitioners indicate that they paid full price for their
respective investments in the Partnerships. Nothing in the
records in these cases indicates that any portion of the
commission or fee was rebated to the petitioners, and there is no
reason to believe that Bachmann, Schwartz, a firm of experienced
accountants which was active in the marketing of tax shelter
investments, failed to claim any portion of the commission
available to them. Abramson testified that the firm generally
charged clients a 5-percent commission; Greene testified that the
commission could have been 10 percent. The record as a whole
establishes that the commission to Bachmann, Schwartz was 10
percent.
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