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1987-470. Respondent contends that IRA and its subsidiaries,
Holding Co. and its subsidiaries, Century Industries, Oyster Bay
Associates, the Delta Partnership, the Alpha Partnership, CMS
Investors and the Bea Ritch Trusts were fraudulent or sham
entities within the meaning of section 6621(c)(3). Therefore,
respondent argues that any underpayments arising from Kanter's
failure to report his income that he assigned to these entities
or that was otherwise reportable as his income even though
reported as income by these entities are attributable to tax-
motivated transactions within the meaning of section 6621(c).
More specifically, respondent argues that underpayments relating
to Kanter's failure to report kickback income as set forth in the
notices of deficiency and amended answers, consulting income
assigned to Century Industries, "bonus payment" income assigned
to Holding Co. through Delta, Alpha, and CMS Investors, income
earned as trustee of Hi-Chicago Trust and assigned to Holding
Co., income assigned to and/or otherwise reported by the Bea
Ritch Trusts, and commission income from Equitable Leasing
assigned to IRA are underpayments attributable to tax-motivated
transactions within the meaning of section 6621(c)(3). We agree
with respondent.
With respect to 1980, as previously indicated with respect
to negligence, Kanter conceded the investment interest expense
deduction of $26,647 from SLG Partners through K & D Associates
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