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(c) Irrespective of whether you understand the entity
receiving the funds to be Deitsch Plastic Company
or Deitsch Plastic Partners, please explain your
understanding of the work performed to earn the
funds received from FIL.
* * * * * * *
(e) Explain your understanding of the work performed
by the shareholders to earn the special
commissions. Please provide any documentation
supporting this understanding.
The October 14, 1999, response from Israel’s Ministry of
Finance reads:
These are the answers from the Assessing Office:
(a) Flocktex did not pay dividends to shareholders in
the years 1992-1993, but instead paid a special
commission.
Files or reports for the 1991-tax year are
unobtainable at such short notice. We requested
this information and would be able to complete our
answer upon its arrival.
(b) The Assessing Officer does not distinguish between
the two separate companies.
(c) The taxpayers contended that the payments were for
services rendered in form of management and
consulting services. The Israeli company reported
the payments as such. There was no question that
management services have actually been given.
Examination of the work performed to earn this
income was not pursued any further.
(e) As in (c) above.
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