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CONTENTS
FINDINGS OF FACT ....................... 5
I. Background ........................ 6
A. Formation and Titling of Stock in Beck's Liquors ... 6
B. Purchases of Condominiums .............. 7
C. Officers ....................... 8
D. Operation of the Business .............. 8
II. Audit of Returns .................... 14
OPINION ........................... 19
Issues 1, 2, & 3: Whether Beck's Liquors Is Liable for the Fraud
Penalty Under Section 6663(a) for Each of the Years at
Issue, and Whether Mr. Beck Is Liable for the Fraud
Penalty Under Section 6663(a) for Fraudulently
Understating His Income on His 1991 Federal Income Tax
Return and Under Section 6651(f) for Fraudulently
Failing To File Federal Income Tax Returns for 1992 and
1993. ....................... 19
I. Underpayment of Tax ................... 20
A. Gross Receipts of Beck's Liquors .......... 21
1. State Bank Deposits .............. 21
2. Cash Payments ................. 22
a. Cash From Till .............. 22
b. Gambling Losses ............. 22
c. Insurance Payment ............ 23
3. Nonincome Items ................ 25
B. Disallowed Expenses ................ 26
1. Payments in Lieu of Wages ........... 28
2. Vehicle Expenses and Depreciation ....... 28
3. Annual Meeting Expenses ............ 29
4. Travel Expenses and Entertainment Expenses .. 30
a. Las Vegas Expenses ............ 30
b. Other Meal and Entertainment Expenses .. 31
c. Cost of Tickets To Various Sporting Events
.................... 32
5. Insurance, Condominium Fees, Utilities, and
Property Taxes Paid for Residences of Mr. Beck,
Michael, and/or Michelle ........... 33
6. Charges on the Corporate Visa Card for Mr. Beck's
Personal Expenses .............. 34
7. Mrs. Beck's Memorials, Funeral, and Medical
Expenses ................... 34
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Last modified: May 25, 2011