- 5 - deductions relating to NLP and Scooper’s. From 1986 through 1990, David managed NLP and reported on his 1990 return $109,000 of compensation relating to his management activities. In that year, David transferred his one-third interest to the other partners. In 1987, Demetree and Associates employed Julia Lloyd as a full-time property manager. She was responsible for collecting rents, preparing monthly rental summaries, and assisting David in securing tenants and negotiating leases for NLP. Following Arthur’s death in 1991, David began managing the properties formerly managed by his father. Ms. Lloyd worked for David in the same capacity that she had for Arthur. David reported the income relating to his property management activities on the Schedules C accompanying his 1991 and 1992 returns and claimed a rental loss deduction relating to 1992. In 1996, Ms. Lloyd asked David to terminate her so that she would be eligible to collect unemployment benefits. When David refused, she retaliated by filing a complaint with the local government authorities alleging David’s business use of a residential condominium. She also contacted respondent, alleged that David had taken funds from Demetree and Associates and failed to report such funds to the Internal Revenue Service, and prepared ledgers documenting the alleged improprieties. Respondent then initiated a criminal investigation of David andPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011