- 10 -
from an illegal activity, however, was not in issue for years
ended 1973 through 1981.
Following the audit of FIP's tax returns for years ended
1973 through 1981, petitioners' accountants became more conscious
of items, especially items of expense, recorded in FIP's books
and records. From time to time, the accountants requested
documentation for items recorded in the books and records to
ascertain whether large or extraordinary items were reasonable
and accurately recorded. The accountants' primary concern was to
prevent personal expenditures' being claimed as business expenses
on FIP's tax returns and to assure that withdrawals from FIP were
properly recorded on FIP's books and records.
On April 9, 1985, FIP's board of directors authorized the
corporation to establish a payroll deduction plan, optional at
the employee's request, whereby certain enumerated payroll
deductions would be allowed, e.g., for automobile insurance
premiums, life, accident, and death and dismemberment insurance,
mortgage payments, corporate and pension plan loan payments,
court orders for family support, and automobile loan payments.
During the years in issue, FIP had in effect a medical expense
reimbursement plan whereby FIP reimbursed covered employees for
their medical expenses. During those years, FIP also had a
matching gift program whereby FIP agreed to match dollar for
Page: 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