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enterprise containing individual or controlling accounts for all
assets, liabilities, net worth items, revenue, and expenses”.)
The general ledgers provided to Agent Sutton list dates, amounts,
and types of expenses, but generally did not identify the
business purpose of the listed expense or provide any supporting
documentation. Petitioners provided Agent Sutton with revised
versions of the general ledgers several times as petitioners
continued to sort through their information. Additionally,
petitioners claimed that they were unable to provide supporting
documentation to Agent Sutton along with the “general ledgers”
because this information was located in Dallas. Ms. Stephenson
added that any such documents by themselves would not have been
helpful without input from petitioner, whom she claimed was busy
with work and travel at this time.
The examination of petitioners’ “general ledgers” raised
additional concerns with Agent Sutton. Many of the amounts on
the “general ledgers” provided by petitioners did not reconcile
to corresponding deductions on any of the numerous tax returns
provided by petitioners during the examination. Ms. Stephenson
noted that even with the final amounts on the “general ledgers”,
Agent Sutton might not “find the exact number on the tax return.”
In addition, some expenses listed on the “general ledgers”
included amounts which had been reimbursed by the University.
For example, one “general ledger” indicated that the
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Last modified: November 10, 2007