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represented to investors that these modifications made the pay
phones compliant with the ADA. The ATC pay phone agreement also
stated: “Phones have approved installation under the
* * * [ADA]”. Petitioner was not provided with a list of the
modifications that were made to the pay phones that were assigned
to him, and he did not know the cost of these modifications.
Petitioner claimed a $1,894 tax credit with respect to the pay
phones on Form 8826, Disabled Access Credit, that was attached to
his income tax return for 2001. For purposes of claiming this
credit, petitioner reported that he had $10,000 of “eligible
access expenditures” during 2001.
Alpha Telcom grew rapidly but was poorly managed and
ultimately operated at a loss. On August 24, 2001, Alpha Telcom
filed for bankruptcy under chapter 11 of the Bankruptcy Code in
the U.S. Bankruptcy Court for the Southern District of Florida.
The case was later transferred to the U.S. Bankruptcy Court for
the District of Oregon on September 17, 2001. On March 15, 2002,
petitioner filed a proof of claim in the bankruptcy court in the
amount of $11,166.80, representing the $10,000 that he had
invested plus approximately 9 or 10 months of payments that he
had not received from ATC as of the claim date. The bankruptcy
case was dismissed on September 10, 2003, by motion of Alpha
Telcom. The bankruptcy court held that it was “in the best
interest of creditors and the estate to dismiss so that
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