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the agent that he was receiving only one-half of the interest.
The agent obtained copies of checks from the buyer of 508
Marsalis which reflected that petitioner was paid the full amount
of interest for 1988 and 1989. In several other respects
petitioner's responses to respondent's agent were false and/or
misleading and shown to be so by third-party investigation by the
agent.
Petitioner received and failed to report interest income for
1985, 1986, 1987, 1988, and 1989 in the amounts of $22,822,
$33,372, $34,052, $17,321, and $7,712, respectively. Petitioner
received and failed to report rental income for 1985, 1986, 1987,
1988, and 1989 in the amounts of $15,693, $19,601, $13,859,
$3,046, and $9,703, respectively. Petitioner failed to report
income from the sale of real properties for 1985, 1986, 1987,
1988, and 1989 in the amounts of $7,884, $18,792, $4,887,
$277,646, and $258,163, respectively. Petitioner was entitled
to, although he did not claim, a $179,905 passive loss deduction
for 1989 as a result of his $200,000 investment with Welch.
Petitioner did not keep complete or accurate records of his
business activity during the years in issue. Petitioner kept no
books of original entry, checkbook records, or other organized
set of books. For purposes of preparing his Federal income tax
returns, petitioner would provide his return preparer, who was a
certified public accountant, with receipts and various papers in
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