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For purposes of preparing petitioners’ Federal income tax
returns, Mrs. Bacon prepared annual summaries of personal income
sources and expenses relating to petitioners’ real properties,
which she gave to their accountant. Mrs. Bacon also provided the
accountant with Forms 1099 and settlement sheets from each real
estate purchase.
In 1991, Mr. Bacon purchased a bar/restaurant called the
Whistler’s Inn under the name Bradam, Inc. (Bradam). Mr. Bacon
was the sole shareholder of Bradam in 1991. The primary source
of income for Whistler’s Inn was from the sale of food, beer, and
liquor.
On or about April 17, 1991, Bradam entered into an agreement
to purchase a liquor license, restrictive covenant, and equipment
relating to the Whistler’s Inn. At settlement, Bradam applied a
$50,000 cashier’s check toward the purchase. The cashier’s check
was purchased with amounts withdrawn from Radtam’s savings
account.10
On or about January 6, 1992, Mr. Bacon filed an application
for a VISA card listing his occupation as tavern owner of Radtam
Inc. t/a Jug Handle Inn and stating that his annual salary was
$299,000. Mr. Bacon reported no salary, wages, or dividends from
Radtam on his income tax returns for the years in issue.
10Account No. 600-871255.
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