Howard J. Kaplan and Brenda L. Kaplan, et al. - Page 31

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          purported contribution to TMC and sent it to Mr. Johnston for his           
          review.  Mr. Johnston reviewed Form 8283 that Mr. Marceron had              
          prepared and informed Mr. Marceron, inter alia, that Part IV,               
          Donee Acknowledgment (donee acknowledgment), had to be completed            
          by TMC, the purported donee, before KQC included it, as required,           
          with the tax return that it was filing for 1999.                            
               KQC, and not Ernst & Young, handled the actual filing of               
          KQC’s 1999 return.  In that return, KQC claimed a noncash chari-            
          table contribution of $1,025,000.  In the section entitled                  
          “Deductions” in Schedule K, Partners’ Shares of Income, Credits,            
          Deductions, etc., KQC showed a charitable contribution of                   
          $1,025,000.  In an explanatory statement attached to that sched-            
          ule, KQC described that claimed contribution as “TEXAS MIGRANT              
          SCHOOL PROPERTY--HELENA, OH”.  Form 8283 that KQC included as               
          part of KQC’s 1999 return (KQC’s Form 8283) indicated that the              
          name of the organization to which KQC claimed it gave certain               
          noncash property was “Texas Migrant School Property” and gave the           
          following description of the property that KQC claimed it gave to           
          TMC:  “Maple Street, Helena, Sandusky County, OH”.  KQC’s Form              
          8283 indicated that the donated property was “Real Estate” and              
          that the condition of such property was “good”.  KQC’s Form 8283            
          showed the fair market value of the claimed donated property as             
          $1,025,000.8  In disregard of Mr. Johnston’s advice that, before            

               8Mr. Mumford’s December 17, 1999 letter indicated that a               
                                                             (continued...)           




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