C. Earl Alsop - Page 6




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               On his 1994 Federal income tax return, Alsop reported gross            
          receipts of $12,000, expenses of $4,257, and net profits of                 
          $7,743 relating to the chiropractic practice.                               
               For 1992, 1993, and 1994, respectively, the trusts that                
          Alsop established filed untimely U.S. Fiduciary Income Tax                  
          Returns.4  On the trust income tax returns that were filed with             
          respondent, certain amounts of gross receipts, expenses, and net            
          profits relating to the chiropractic practice were reported.                
          Also, however, on the income tax returns of the trusts that were            
          filed with respondent, deductions were claimed for purported                
          distributions of trust income to the trust beneficiaries.  As a             
          result of the distribution deductions that were claimed for each            
          trust, for 1992, 1993, and 1994, negative taxable income and zero           
          Federal income tax liability were reported for the trusts.                  
               On his Federal income tax returns for 1992, 1993, and 1994,            
          Alsop did not report as taxable income any distributions from the           
          trusts.  The record does not reflect whether other beneficiaries            
          of the trusts reported as taxable income on their Federal income            
          tax returns distributions they received from the trusts.                    
               On audit, Alsop was not cooperative, and he did not provide            
          respondent with copies of the trust documents until a court order           
          to do so was issued on January 17, 1997.  After reviewing the               


          4    For 1992, one of the trusts that Alsop established has yet             
          to file a U.S. Fiduciary Income Tax Return.                                 




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