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corporation as a consultant; and in 2000 founded, and began
working for, 101 Positron.
The credibility problems grew when the Commissioner
introduced time logs that each brother produced to the IRS during
audit and pretrial preparation. Kai submitted his first 1999 log
at his appeals conference with the IRS; Ulysses produced logs for
both years at his IRS audit. A side-by-side comparison shows:
First log to IRS Log introduced at trial
Kai 1999 - 1125 1999 - 2087
2000 - N/A 2000 - 2226
Ulysses 1999 - 994 1999 - 2063
2000 - 875 2000 - 2102
If the brothers are to be believed, they each discovered
more than a thousand missing hours for each year between the time
of the audit and the time of trial. But the logs introduced at
trial are packed with too much exaggeration to be believed. Here
are a few examples from Ulysses’:
! 280 hours each year to close the books and prepare
information about the partnership for he and his
brother to use in completing their tax returns.
! 80 hours in 2000 preparing for an IRS audit because the
partnership’s records were in such disarray, despite
his 280 hours of work in closing the books. (The audit
of the 2000 returns, of course, did not actually take
place in 2000.)
! 24 hours to replace four miniblinds in one of the
apartments, 42 hours to paint another, and 56 hours to
install a new toilet in a third.
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Last modified: May 25, 2011