Ronald D. Ciaravella - Page 11

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               Dolphin reimbursed Mr. Ciaravella for his race car                     
          expenditures by making deposits into the checking account of his            
          sole proprietorship, Innovative.  For the years 1992 and 1993,              
          Mr. Ciaravella reported amounts received from Dolphin on the                
          Innovative Schedules C as gross receipts from advertising and               
          also deducted the same amounts as expenses relating to race car             
          activities on the Innovative Schedules C.  He also claimed                  
          depreciation deductions on the race car and the trailer used to             
          haul the race car and deducted the costs of replacement parts and           
          maintenance of the car, as well as payments made to Tim Albright,           
          who was responsible for maintaining the race car and was the head           
          of the pit crew at the races.                                               
               Dolphin also made payments to Innovative for expenses                  
          arising from Dolphin's conventional advertising activities.                 
          Trade publications and magazines, in which Dolphin placed                   
          advertisements, would send their invoices to Dolphin and                    
          correspond directly with Dolphin.  However, payments for the                
          advertising services were made from Innovative's checking account           
          and were deducted by Mr. Ciaravella on the Innovative Schedules C           
          for the years 1992 and 1993.                                                
               Mr. Ciaravella reported gross receipts and expenses of                 
          Innovative on Schedules C for the years 1992 and 1993 in the                
          following amounts:                                                          







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Last modified: May 25, 2011