Inverworld, Inc., et al. - Page 6

                                        - 6 -                                         
          being deposited with or withdrawn from U.S. institutions,                   
          including Frost Bank in San Antonio, where the clearing account             
          was maintained.  Additionally, INC maintained records of LTD’s              
          and its clients’ positions with respect to such currency                    
          transactions.                                                               
               LTD ceased to conduct the currency transactions in its own             
          name as of its taxable year ended June 30, 1989.  LTD's currency            
          transaction income derived from, inter alia, the fees, which were           
          reflected in the exchange rates, that LTD charged its clients.              
          The gross receipts and direct costs relating to LTD’s income from           
          "Currency Transactions" for each taxable year are as follows:               
                    TYE June 30    Gross Receipts    Direct Costs                     
                    1985            1$531,003          - 0 -                          
                    1986                 745,001       130,485                        
                    1987             2434,867          16,125                         
                    1988             3232,426          16,863                         
               1This amount is net of expenses.  Neither the revenue                  
          agent's workpapers nor Deloitte's workpapers reveal the gross               
          receipts.                                                                   
               2The amount of gross receipts includes a check of $11,361              
          from the Guadalajara office representing its contribution to                
          profits.                                                                    
               3The amount of gross receipts includes a check of $16,426              
          from the Guadalajara office representing its contribution to                
          profits.                                                                    
                    c.   Client Incorporation and Trust Creation Fees                 
               LTD offered its clients the option of establishing offshore            
          corporations and trusts to hold their investments.  Each client             
          signed a discretionary authorization granting LTD the power to              
          invest the funds held by the client’s corporation or trust.                 





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011