- 58 -
of $90,503.82, $6,681.23, and $20,960, respectively, on the C-
group products and Sygnet group annuities sold to the Lakewood
Plan. Kirwan also received, in or about 1996, commissions equal
to 5 percent of the conversion credits, both earned and unearned,
which were applied to the C-group conversion UL policies of Drs.
Hirshkowitz, Desai, and McManus. These commissions totaled
$29,746.93 (($33,630 x 5%) + ($12,486 x 5%) + ($74,739 x 5%) +
($215,730 x 5%) + ($80,177.70) + ($55,234.80) + ($122,941.12 x
5%).
The 1991, 1992, and 1993 Forms W-2 issued by Lakewood to
Drs. Hirshkowitz, Desai, Sobo, McManus, and Sankhla did not
report any taxable life insurance benefits provided to them under
the Lakewood Plan. Dr. Hirshkowitz reported $4,590, $4,590, and
$13,338 as P.S. 58 income on his joint 1991, 1992, and 1993
Federal individual income tax returns, respectively. Drs. Desai,
Sobo, McManus, and Sankhla did not report on their 1991, 1992, or
1993 Federal individual income tax returns any income from the
life insurance benefits provided to them by Lakewood.
Respondent determined that Lakewood could not deduct the
amounts claimed as contributions to the Lakewood Plan in its
October 31, 1991, and its 1992 and 1993 taxable years and
disallowed the related claimed deductions of $480,901, $209,869,
and $296,056, respectively. In contrast with the Neonatology
adjustments, respondent’s Lakewood adjustments do not reflect the
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