- 6 - Petitioner was aware that the bonuses were not included in the joint Federal income tax return filed for 1994 and 1995. Mr. Sullivan received salary and bonuses in 1993, 1994, and 1995, as follows: Year Salary Bonus Total 1993 $92,379 $75,000 $167,379 1994 100,000 100,000 200,000 1995 100,000 125,000 225,000 In the same manner as petitioner, Mr. Sullivan was not issued Forms W-2 for the bonus amounts and he did not report his bonuses on his 1993, 1994, and 1995 income tax returns. Mr. Sullivan was criminally prosecuted with respect to his omissions of the bonuses and pleaded guilty to filing a false return for 1995. He was required to make restitution by paying income tax on the omitted bonuses for 1993, 1994, and 1995. Mr. Sullivan was not aware that petitioner’s bonuses were not reflected on a Form W-2 or that there was no withholding for her 1993, 1994, or 1995 bonuses. During 1996, the corporation’s in-house counsel hired certified public accountants to examine or audit the corporation’s books because of discrepancies on the corporation’s Federal tax returns. The examination was conducted during January 1997, and, as a result, the corporation filed revised employment tax returns. In addition, revised Forms W-2 for 1993, 1994, and 1995 were prepared and issued only to two of the corporation’s employees. The discrepancy discovered by thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011