- 3 - adjustments, and charged petitioner with the fraud addition to tax for each year. Respondent’s adjustments and the capacity in which various funds, bank deposits, and stock were received by petitioner, whether they constitute taxable income to petitioner, the deductibility of the disputed deductions, and respondent’s imposition of the fraud addition to tax are the subject of much confusion and disagreement between the parties. Certain items of income and deductions have been conceded. Also, petitioner now claims additional deductions that were not reflected on his Federal income tax returns and that were not properly raised in his pleadings. FINDINGS OF FACT When the petitions were filed, petitioner resided in Houston, Texas. During the years in issue, petitioner practiced law primarily as a litigation specialist, and petitioner owned and operated in Houston, Texas, a law firm under the name of Payne & Associates. Petitioner provided extensive legal representation to and eventually managed, controlled, and owned the stock of 2618, Inc. (2618 Inc) a corporation that owned and operated in Houston, Texas, a topless dance club under the name of Caligula XXI (the Club). During part of the years in issue, Gerhard Helmle (Helmle) owned 50 percent of the stock of 2618 Inc, and he assisted in managing operations of the Club. Petitioner also provided legalPage: 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