- 4 - 1994, petitioner Sheila Smith, and petitioners' daughter, Tara Smith, were also authorized to use the Gold card. The monthly statements separately identified petitioner's, Sheila's, and Tara's charges. Each of them regularly charged personal expenses on the Gold card. Petitioners also had numerous Visa credit cards which were used solely for charging personal expenses. The monthly statements for both the Corporate card and the Gold card were forwarded to Tracstar. Kathy Parsons, Tracstar's bookkeeper during 1994, would review each of the itemized charges and determine whether a charge constituted a business expense of Tracstar or a personal expense. Regardless of the nature of the charges, Tracstar would pay the entire account balance. To the extent that personal expenses were charged to the Corporate Card and the Gold card by petitioner and his family, the amounts of such personal expenses which were paid by Tracstar were debited to an account labeled "Due from Officer Smith" (the personal expense account).5 Tracstar's balance sheet dated December 31, 1993, shows a debit balance in the personal expense account in the amount of $19,717.28. In early August of 1994, Tracstar's management, including petitioner, decided to begin issuing periodic bonuses to its 5 This accounting procedure was not followed for the Dec. 22, 1994, Gold Card statement. Rather, after making her determination of the personal versus business nature of the expenses, Ms. Parsons forwarded the statement to petitioner for him to pay in full and credited the personal expense account by the amount of the business expenses for the billing period.Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011