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owned 27.5 percent of the business. The children of petitioner
and Mr. Blodgett, Michael J., Matthew, and Christina, each held
15 percent of the business. The record is silent as to
petitioner’s participation in the business.
The business had a defined benefit pension plan, the T.G.
Morgan Defined Benefit Pension Plan (pension plan). However, the
record is not complete with respect to the formation,
administration, and records of the pension plan. Insofar as the
record reveals, its activity was not reported to the Internal
Revenue Service on Form 5500-EZ, Annual Return of One-Participant
(Owners and Their Spouses) Retirement Plan. Petitioner
introduced at trial an unfiled Form 5500-EZ relating to the
pension plan.
Through the financial success of the business, petitioner
and Mr. Blodgett were able to lead a lavish lifestyle. In 1989,
Mr. Blodgett purchased an original Simbari oil painting for
petitioner for $85,000. Petitioner admired the artist, and the
painting was displayed in petitioner’s home. In 1990, petitioner
and Mr. Blodgett purchased a condominium and lot at Key Largo,
Florida (Florida property). They bought furniture and had it
shipped to the property. They never occupied the property, nor
did they rent it out for any period of time. They visited the
property once, as Mr. Blodgett stated, “to tour it”.
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Last modified: May 25, 2011