Investment Research Associates - Page 229




                                       - 299 -                                         
              Year      Prudential         Other         Omitted Income                
              1978      $3,839          --                  $3,839                     
              1979      41,502           --                 41,502                     
              1980      87,009           --                 87,009                     
              1981      103,994         $80,616             184,610                    
              1982      157,778         70,538              228,316                    
              1983      72,181          294,075             366,256                    
              1984      75,048          822,840             897,888                    
              1986      63,353          1,069,335      1,132,688                       
              1987      66,867          132,322             199,189                    
              1988      62,987          96,188              159,175                    
              1989      79,665          42,332              121,997                    
              For each of the years 1979 through 1989, Kanter filed                    
         Federal income tax returns which reported adjusted gross income               
         and income tax paid as follows:                                               
                              Adjusted Gross           Income                          
                   Year       Income (Loss)             Tax Paid                       
                   1978       ($44,386)                $1,671                          
                   1979       (105,084)                     --                         
                   1980       (155,026)                     --                         
                   1981       (53,614)                      --                         
                   1982       (287,536)                     --                         
                   1983       (819,449)                     --                         
                   1984       (804,482)                     --                         
                   1985       (954,695)                     --                         
                   1986       (1,529,213)                   --                         
                   1987       (2,004,257)                   --                         
                   1988       (1,340,459)                   --                         
                   1989       (1,331,576)                   --                         
              Kanter paid no Federal income taxes during an 11-year                    
         period, and only minimum tax in 1978 of $1,671.  However, he did              
         pay self-employment tax for the years 1978 ($1,434), 1979                     
         ($1,855), 1980 ($2,098), and 1983 ($3,338).                                   
              Because respondent has shown by clear and convincing                     
         evidence that Kanter, Ballard, and Lisle omitted income on their              
         Federal income tax returns for each of the years at issue,                    






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