David D. Parrish - Page 5

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          trustee in determining who received funds from M&L during the 1-            
          year period (from October 1989 through October 1990) prior to the           
          filing of M&L's bankruptcy petition.  The firm determined that              
          during this period M&L transferred $375,452.01 to petitioner and            
          that petitioner transferred $46,162 to M&L.  The trustee then               
          filed suit to recover funds from petitioner.  On February 8,                
          1994, the bankruptcy court entered a judgment for $375,534.01               
          against petitioner.  Petitioner subsequently reached an agreement           
          requiring him to periodically remit 15 percent of his net income            
          to the trustee.                                                             
               Petitioner filed his 1988 and 1989 Federal income tax                  
          returns on April 26, 1991, and his 1990 return on December 28,              
          1992.  In October of 1993 Gudrun Stacks, the IRS agent assigned             
          to audit petitioner's returns, asked petitioner to provide bank             
          and other records relating to M&L investments.  On several other            
          occasions Agent Stacks requested such records, but petitioner did           
          not provide them.  Other sources subsequently provided Agent                
          Stacks with copies of M&L checks made payable to petitioner and             
          petitioner's bank records.  Agent Stacks analyzed bank records              
          relating to petitioner's 1988 and 1989 tax years and examined M&L           
          checks issued to petitioner during his 1990 tax year.  Upon                 
          completing her analysis, Agent Stacks determined that petitioner            
          had unreported income of $72,415, $386,663, and $165,822 for                
          1988, 1989, and 1990, respectively.                                         





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