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deductions for the fiscal year ending January 31, 1981
because I was not a shareholder for any portion of that
year.
5. The amount of additional income omitted in
each of the years for which amended returns are being
filed by me is as follows:
Amount of
Year Unreported Income
1983 $31,399.81
1984 16,392.90
Total: $47,792.71
Pursuant to the cooperation agreement, Mr. Feinsmith filed a
second amended 1984 personal income tax return on September 2,
1987. On this return, Mr. Feinsmith reported that, in addition
to the income reported on his original and first amended return
for 1984, he received from Randy Hall during that year a
“Constructive Dividend” of $52,320. Mr. Feinsmith attached an
affidavit to this second amended return stating:
HARVEY FEINSMITH, being duly sworn, deposes and
says:
1. I am the President and a shareholder of Randy
Hall, Inc. On or about December 31, 1985, Randy Hall,
Inc. filed amended federal income tax returns (Form
1120) for the fiscal years ending January 31, 1981,
January 31, 1983, and January 31, 1984. At the same
time, I filed amended personal tax returns (Form 1040)
for calendar years 1983 and 1984. An affidavit was
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
were filed, Randy Hall, Inc. claimed false, non-
existent business deductions for purported purchases
which were not, in fact, made. At the time of filing
the amended returns, the officers of Randy Hall, Inc.
believed that the false deductions totalled
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