- 8 -
the luxury automobiles and the provision of the office space to
SRI as due to "the substantial business relationships with the
Ohanesian Family Trust, and John [Ohanesian] asked for it."
The suit between petitioner and Ohanesian was decided by a
jury. In pertinent part, the jury's special verdict found as
follows: (1) Valid contracts existed between petitioner and the
related entities; (2) petitioner performed as required under the
contracts; and (3) members of the Ohanesian family and the Trust
converted personal property to their own use.
As a result of the conflicting allegations and testimony in
the State court suit, and petitioner's and the Ohanesians'
failure to offer any other evidence to substantiate their claims,
respondent issued statutory notices of deficiency to both the
Ohanesians and petitioner. In the notice of deficiency to the
Ohanesians, respondent determined that the amounts paid to
petitioner by the Ohanesians did not constitute investment
expenses and were, therefore, not deductible. This determination
was supported by Ohanesian's testimony in State court that
petitioner was a conduit for payment of his personal expenses.
In petitioner's notice of deficiency, respondent disallowed,
among other things, the following expenses (collectively referred
to herein as the Ohanesian-related items):
Adjustments to Income TYE 1988 TYE 1989
Automobile depreciation $17,280 $21,900
Other automobile costs 20,475 39,568
Ohanesian expenses 26,592 12,569
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