- 380 -
It is noted that the arrangements pertaining to Equitable
Leasing are similar to Kanter's method of operations for many
other investments involved in these cases, such as Prudential and
Century Industries. Payments were made to different affiliated
entities of Kanter. Often the records were confusing. However,
the only individual performing substantial services was Kanter.
Accounting records sometimes showed that another entity reported
the transaction for tax purposes. In other instances, accounting
records were destroyed, purportedly pursuant to a 3-year records
destruction policy. The records destruction policy was an
intentional means of preventing detection of Kanter's planning
devices. There was frequently a lack of supporting documentation
which we think must be held against Kanter and in favor of
respondent. This is especially true in view of Kanter's
background, training, experience, knowledge, and his failure to
explain the accounting for the services he rendered.
Accordingly, we sustain respondent's determination on this
issue.
Issue 7. Whether Kanter Had Unreported Income in 1982 Based on
the Bank Deposit Analysis Method
FINDINGS OF FACT
In the notice of deficiency for 1982, respondent determined
that $2,800,410 in deposits to Kanter's financial accounts with
American National Bank of Chicago during 1982 constituted
unreported gross income for the reason that Kanter did not
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