Ella Freidus - Page 25

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          explanations of behavior are a badge of fraud.  Petitioner notes             
          on brief that the Pierpont Account was needed to prevent Mr.                 
          Freidus from making unauthorized purchases on petitioner's behalf            
          at art auctions.  However, this self-serving assertion is not                
          supported by the record.                                                     
               Petitioner's use of nominee corporations is further evidence            
          of asset concealment.  See Jones v. Commissioner, T.C. Memo.                 
          1994-230, affd. without published opinion 68 F.3d 460 (4th Cir.              
          1995) (finding that a taxpayer's use of alter ego corporations to            
          conduct personal as well as business transactions was evidence of            
          asset concealment).  The record shows that the corporate accounts            
          were mere repositories for proceeds derived from petitioner's                
          income producing activities.  In addition to proceeds from sales             
          of her Golden Maharajah Diamond and Picasso Ceramics which were              
          deposited into the Ivory Land account, petitioner also deposited             
          proceeds from horse sales into the Ivory Ranch account.  Since               
          petitioner's nominee corporations did not file returns, tracing              
          and attributing income to petitioner would be severely impeded.              
               Petitioner argues that the corporations were formed solely              
          to hold title to real property and to insulate her from personal             
          liability.  Once again, petitioner's assertion is contradicted by            
          the record.  The parties have stipulated that the corporate                  
          accounts were used to pay petitioner's personal expenses.                    
          Petitioner also used corporate funds to invest in fine art and to            

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