- 36 -
Well, if these things were not resolved
amicably, it could have been a divisive matter,
which would have-–could have led to litigation,
as I said, I didn't have malpractice insurance,
and also, a loss of clients and client good will.
That's my rationale for paying them.
In effect, petitioner states that the subject payments were
made "to resolve older matters probably pertaining to years
'82 to '84". Petitioner gives no explanation of the
matters that were resolved.
Petitioner's testimony concerning the payments made
on behalf of his parents similarly fails to describe the
nature of those payments. Petitioner's testimony is as
follows:
The next check is 50-–is 22-3, which was
paid directly to the Internal Revenue Service
on behalf of my father, Eric Friedmann. It's
actually my parents, Eric and Phyllis Friedmann,
for a tax problem. I would just note that my
parents were clients and in the year 1989, they
paid me taxable fees of $7,374. When I say they
paid me fees, these are all reflected in my
income schedules that were reconstructed, that
are found in files 20-J for 1989 and 21-J for
1990. And these have been accepted by the
Internal Revenue Service for purpose-–as noted
in the audit work papers, although they don't tie
in precisely to the income per the tax return.
The next item has to do with Eric Friedmann,
who is, again, my father. These had to do with
items 15-A2, A3, A4, and A10. The first one
being payment directly to New York State on
behalf of him of $470.29. The next one is 15-A3,
had to do with payments directly to New York
State in the amount of $114.70. The next one is
15-A4, which is payment directly to New York
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