Lisa B. Williams - Page 7

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          accountants specifically concerned Mr. Sullivan’s and                       
          petitioner’s bonus checks that had been deducted by the                     
          corporation as salary, but had not been reported to the                     
          Government as such on Forms W-2.  In addition, no withholding tax           
          had been taken from petitioner’s and Mr. Sullivan’s bonuses.                
               Petitioner’s friendship with Dr. Deland ended during 1996,             
          after petitioner’s sister, who also worked for the corporation,             
          was dismissed from her position.  Petitioner did not receive a              
          bonus during and for the 1996 year, and she resigned from the               
          employ of the corporation.                                                  
               During the spring of 1997, the corporation sent petitioner             
          Forms W-2c, Statement of Corrected Income and Tax Amounts, for              
          1993, 1994 and 1995, which reflected the bonuses (additional                
          compensation) in the amounts of $25,000, $35,000, and $35,000,              
          respectively.  After receiving the Forms W-2c, petitioner did not           
          amend her 1993, 1994, or 1995 income tax returns to report the              
          increased amounts reflected on the Forms W-2c.  During December             
          1997, petitioner was advised that she was under criminal                    
          investigation by the Internal Revenue Service.  Ultimately, there           
          was no prosecution of petitioner in connection with her tax                 
               During 1995, petitioner’s husband received a $1,300                    
          distribution from Mutual of America which was reflected on a Form           
          1099-R, Distributions From Pensions Annuities, Retirement or                

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