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In 1988, Mr. Davis paid, incurred, and deducted on his
Schedule C for 1988 the following legal fees:
Matter Incurred Paid Deducted
Squirrel Bend litigation $252,972 $133,082 $252,972
SEC litigation 11,646 11,646 11,646
Orange Co. litigation 3,221 3,221 3,221
Tax matters 7,447 7,447 7,447
General business matters 4,225 4,225 4,225
Hong Kong venture 32,368 32,368 14,823
Total 311,879 191,989 294,334
Consulting Fees
On his Schedules C for 1987 and 1988, Mr. Davis deducted as
professional expenses payments he made to his son, Charles Davis,
in the amounts of $16,600 and $36,000, respectively.
Tax Returns
Mr. Davis timely filed Federal income tax returns, Forms
1040, for 1976, 1984, 1985, and 1987. On April 17, 1989, Mr.
Davis filed Form 1045, Application for Tentative Refund, on which
he carried back an NOL in the amount of $489,696, generated in
1988, to 1985 (1988 NOL).
Preparation of Mr. Davis' Tax Returns
1. Mr. Fenn
Donald Fenn (Mr. Fenn) is a public accountant in Ohio. He
received a bachelor of science from Bowling Green State
University, where he majored in accounting. Since 1958, Mr. Fenn
has been employed as a public accountant. He prepares Federal
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