Bentley Court II Limited Partnership, B.F. Bentley, Inc., Tax Matters Partner - Page 4

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          false reports of occupancy beginning in late 1992 through mid-              
          1997.  The indictment was filed on June 16, 1998.  The 21 related           
          counts were dropped, including allegations that Lewis falsely               
          lowered the income amounts for some tenants and indicated that              
          certain student tenants were not students.                                  
               Following an examination of Bentley Court’s tax returns, the           
          examining revenue agent concluded that Bentley Court had                    
          falsified documents, including changing income amounts and                  
          indicating that certain Bentley Court tenants were not students,            
          when, in fact, they were.  These falsifications were effected to            
          support Bentley Court’s claim for the qualified tax status                  
          involving low-income housing credits.  A review conducted by the            
          South Carolina State Housing Finance and Development Authority              
          revealed that 90 percent of the tenants in Bentley Court’s                  
          apartment complex were students.  Respondent’s examining agent              
          concluded that the apartment complex did not qualify because it             
          did not have qualified tenants, as defined by law.  Accordingly,            
          the low-income housing credits were disallowed for Bentley                  















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