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Payments Made by Mr. Ray to Ms. Bader
The arbitration agreement did not require alimony payments to
begin until April of 2002. The divorce decree, likewise, did not
require alimony payments to begin until April 1, 2002.
Nevertheless, at the end of March of 2002, Mr. Ray made a payment
to Ms. Bader--check No. 1095, dated March 22, 2002, in the amount
of $3,000.
During the examination of his return by respondent, Mr. Ray
substantiated that he paid alimony of $16,000 between April 1 and
August 1, 2002. All of the payments were made by personal checks,
and some of the checks included both alimony and child support.
The final payment was check No. 1219, which bore the notation of
“Alimony-Final”. A summary of the substantiated alimony payments
follows:
Check No. 2002 Date Amount Alimony Child Support
1109 Apr. 8 $3,000 $2,000 $1,000
1114 Apr. 21 3,000 2,000 1,000
1129 May 5 3,000 2,000 1,000
1161 June 5 2,0001 2,000 --
1162 June 6 2,000 2,000 --
1177 June 21 2,000 2,000 --
1199 July 8 2,000 2,000 --
1219 July 24 2,000 2,000 --
The 2002 Deficiencies
Mr. Ray married his current wife, Rochelle Ray, in 2002.
They jointly filed a 2002 Form 1040, U.S. Individual Income Tax
Return, prepared by Ernst and Young LLP, on which they claimed an
1Although the exhibits prepared by Mr. Ray indicated that
check No. 1161 was a check for $3,000, the bank statement shows
that the correct amount is $2,000.
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Last modified: May 25, 2011