- 8 -
percent of the shares of FFP. The record does not show the full
extent of services that Craig performed for FIP or for any other
corporation controlled by Mr. Gherman. Craig did not testify at
the trial.
Mr. Rance, Shari's husband, was on FIP's payroll as well.
He managed FIP's real estate holdings, buildings, and office
buildings. He additionally managed Custom-Molded, an orthopedic
equipment company, for FIP.
Other than 1982, FIP operated at a loss. On its Forms 1120,
U.S. Corporation Income Tax Return, for tax periods ended March
31, 1984 through 1989, FIP reported gross receipts, total income,
and income or loss before net operating loss (NOL) as follows:
Gross Total Taxable income
FYE receipts income (loss) before NOL
3/31/84 $1,395,875 $1,482,346 ($77,338)
3/31/85 1,433,183 1,608,507 (251,665)
3/31/86 1,609,935 1,879,881 (233,033)
3/31/87 1,337,567 1,687,830 (812,602)
3/31/88 1,400,911 1,691,473 (473,238)
3/31/89 481,629 712,444 (143,554)
The returns for tax periods ended March 31, 1988 and 1989, were
prepared by or for the trustee in bankruptcy for the 1988
bankruptcy. See infra.
During the years 1980 through 1985, FIP filed five petitions
with the Court relating to taxable periods ended 1973 through
1981. In the notices of deficiency for those periods, respondent
determined deficiencies in tax, in the aggregate, totaling
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