Gary Friedmann - Page 38




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                  wires, items 30 and 30(a) and 30(b) were funds                      
                  paid directly-–wired directly to the client's                       
                  personal account.                                                   

             As true throughout petitioner's testimony at trial,                      
             petitioner offers no explanation for the nature of the                   
             services he provided to Ms. Lynch, the problems that arose               
             with respect to those services, or the reason for his                    
             payment of those funds.                                                  
                  Finally, in one instance, petitioner claims to have                 
             made a direct refund of fees to Dr. Strom in the amount of               
             $930.  When asked about this payment at trial, petitioner                
             stated as follows:                                                       

                  Well, basically, it had to do with--I looked                        
                  after his investments and as well as doing his                      
                  personal-–doing his taxes and corporate work, and                   
                  he didn't feel the investments performed as well                    
                  as expected.  Some of this had to do with                           
                  indemnities and the value of some of his                            
                  investments.                                                        
                                                                                     
                  For the above reasons, we find that petitioner has                  
             failed to meet his burden of proving that any of the direct              
             payments offset his gross receipts or can be deducted under              
             section 162.  Accordingly, we hereby sustain respondent's                
             determination as to these payments.                                      











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