Donald G. Ford - Page 5

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                    (s)  On that same date, Petitioner paid $6,000.00                 
               to Schultz for accounting fees.                                        
                    (t)  On that same date, the Bank of Louisville                    
               debited Petitioner’s personal checking account for                     
               $2,036.67 and credited that amount to interest owed on                 
               Schultz’s $800,000.00 note.                                            
                    (u)  On March 20, 1988, Huber’s, Inc., paid in                    
               full the balance on the $300,000.00 promissory note,                   
               plus interest, by a check payable to Schultz in the                    
               amount of $330,969.93.                                                 
                    (v)  On that same date Schultz endorsed the                       
               $330,969.93 check for deposit in petitioner’s checking                 
               account.                                                               
                    (w)  On October 19, 1987, Petitioner filed his                    
               return for his 1986 tax year.  The return included a                   
               Schedule C for "Financing - Sales Notes."  The Schedule                
               C shows gross receipts of $800,000.00, with a related                  
               cost of goods sold of $1,100,000.00, and a loss in the                 
               amount of the $300,000.00 difference.  When the loss                   
               was combined with interest income, the net result was a                
               negative gross income of $187,586.00.  And the net                     
               result on Petitioner’s return for his 1986 tax year is                 
               a reported loss for taxable income of $234,345.00, and                 
               a return that is false as to a material fact.                          
                    (x)  The negative taxable income of $234,586.00                   
               produced carryforward amounts that were carried forward                
               to Petitioner’s returns for his 1987, 1988, 1989, and                  
               1990 tax years, making each of those returns false as                  
               to a material fact.                                                    
                    (y)  As part of his fraudulent actions, Petitioner                
               willfully failed to report on his return for his 1986                  
               tax year the $800,000.00 in income that he received as                 
               an installment payment on the 1984 sale of the                         
               buildings.  If that income had been properly reported                  
               it would have resulted in $739,840.00 in additional                    
               taxable income for Petitioner’s 1986 tax year.                         
                    (z)  As part of his fraudulent actions, Petitioner                
               willfully failed to report on his return for his 1988                  
               tax year the $300,000.00 in income that he received as                 
               an installment payment on the 1984 sale of the                         
               buildings.  If that income had been properly reported                  





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