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attributable to its taxable year ended January 31, 1984. His 1/3
share was actually $16,392.90. The parties agree that $16,392.90
is a constructive dividend to Mr. Feinsmith arising out of
deductions not allowable on Randy Hall’s 1983 corporate income
tax return. Mr. Feinsmith attached to his amended 1984 return an
affidavit that stated in relevant part:
HARVEY FEINSMITH, being duly sworn, deposes and
says:
1. I am the President and a shareholder of Randy
Hall, Inc. Randy Hall, Inc. is filing amended federal
income tax returns (Form 1120) for the fiscal years
ending January 31, 1981, January 31, 1983, and January
31, 1984. I am filing amended personal tax returns
(Form 1040) for calendar years 1983 and 1984. An
original of this affidavit is being attached to each of
the above-described amended returns to explain the
purpose of the amendments and the nature of the
adjustments to income.
2. During the period for which amended returns
are being filed, Randy Hall, Inc. claimed false, non-
existent business deductions in the amount of
$337,300.28 for purported purchases which were not, in
fact, made. * * *
3. The false deductions claimed by Randy Hall,
Inc. were in the following amounts for each of the
years for which amended returns are being filed:
Amount of False
Fiscal Year Ending Deduction
1981 $193,922.15
1983 94,199,43
1984 49,178.70
Total: $337,300.28
4. During the years 1983 and 1984, and because of
the false deductions referred to above, I received a
total of $47,792.71 in income which I did not report on
my tax returns for those two years. I did not receive
any income as a result of Randy Hall, Inc.’s false
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