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except for 1978, petitioner and Dr. Alt had deficiencies
determined on their jointly filed tax returns.2
Through K.L. Financial Management, Karen created over 40
corporations through which Dr. Alt’s income was funneled.
Petitioner’s family members were listed as the officers of these
corporations, and several of the corporations were nominees of
petitioner and Dr. Alt. Petitioner and Dr. Alt maintained no
personal bank accounts and paid their personal expenses
(household expenses, trips, shopping, and leased cars) through
the corporate bank accounts. During the years at issue,
petitioner paid the personal expenses and often made deposits
into the corporate bank accounts on behalf of Karen and Dr. Alt.
During the years at issue, petitioner and Dr. Alt purchased
several properties, including houses for their children and a
600-acre riverfront property upon which a Georgian mansion was
being built. Further, Dr. Alt had a pension fund of $500,000,
and Dr. Alt and petitioner borrowed $500,000 in order to purchase
a business for their son. Petitioner was able to purchase
valuable antiques. Petitioner and Dr. Alt also provided
2 On Apr. 29, 1985, petitioner and Dr. Alt filed a petition
with the Tax Court regarding a notice of deficiency for the 1981
taxable year. On May 27, 1986, the Court entered a decision in
which the parties agreed that petitioner and Dr. Alt owed taxes
in the amount of $83,655.40 plus additions to tax for the 1981
taxable year. Petitioner signed this decision document.
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