Investment Research Associates - Page 221




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         complete dominion'", including illegal earnings.  James v. United             
         States, 366 U.S. 213, 219 (1961) (quoting Commissioner v.                     
         Glenshaw Glass Co., 348 U.S. 426, 431 (1955)); accord Rutkin v.               
         United States, 343 U.S. 130, 137-138 (1952); Ianniello v.                     
         Commissioner, 98 T.C. 165, 173 (1992).                                        
              We have held that the payments made by the Five to IRA                   
         related to the Prudential transactions are taxable 45 percent                 
         each to Ballard and Lisle and 10 percent to Kanter and the                    
         remaining payments made to IRA and Holding Co. are taxable 100                
         percent to Kanter.  Our holding is supported by clear and                     
         convincing evidence in the record.                                            
              Kanter entered into arrangements pursuant to which he would              
         use his business and professional contacts, including his                     
         relationship with Ballard and Lisle, to assist members of the                 
         Five in obtaining business opportunities or in raising capital                
         for business ventures.  In exchange for his services, Kanter                  
         received or shared in certain fees.  Kanter established a complex             
         organization of corporations, partnerships, and trusts to                     
         receive, distribute, disguise, and launder the payments from                  
         these arrangements.  The payments were made to entities                       
         controlled by Kanter and then distributed through various means               
         to Ballard, Lisle, and Kanter, their family members, or to                    
         entities established for the benefit of their families.                       








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