-8-
2. Frey ..................... 289
3. Schaffel ................... 290
4. Schnitzer/PMS ................. 291
5. Loans to Ballard ............... 292
6. Ballard’s Disclosures to Goldman Sachs .... 292
7. Kanters’s Letters to the Ballard and Lisle
Children ................... 293
H. Conclusion and Schedule of Income Adjustments ... 295
ISSUE II. Whether Kanter and Ballard Are Liable for
Additions to Tax for Fraud ............ 298
OPINION
A. Failure To Report Substantial Amounts of Income .. 300
B. Concealment of the True Nature of the Income and
the Identity of the Earners of the Income ..... 301
C. Use of Sham, Conduit, and Nominee Entities .... 301
D. Reporting Kanter’s and Ballard’s Income on IRA’s
and THC’s Tax Returns ............... 302
E. Commingling of Kanter’s and Ballard’s Income With
Funds Belonging to Others ............. 303
F. Phony Loans .................... 303
G. False and Misleading Documents .......... 304
H. Failure to Cooperate During the Examination Process 304
I. Conclusion .................... 306
ISSUE III. Whether Commitment Fees Paid to Century
Industries, Ltd., During 1981 to 1984 and 1986
are Includable in Kanter’s Income ........ 307
FINDINGS OF FACT
OPINION
A. The Parties’ Arguments .............. 316
B. TEFRA Partnership Provisions ........... 317
C. The STJ Report .................. 318
D. Analysis ..................... 319
ISSUE IV. Whether Kanter Received Unreported Income From
Hi-Chicago Trust During 1981 to 1983 ....... 324
FINDINGS OF FACT
OPINION
A. The Assignment of Income Doctrine ......... 326
B. The Parties’ Arguments .............. 327
C. Analysis ..................... 327
ISSUE V. Whether Kanter Is Taxable on Income Attributed
to the Bea Ritch Trusts for 1986 and 1987 ..... 330
FINDINGS OF FACT
A. The Bea Ritch Trusts ............... 330
B. Oyster Bay Associates Partnership ......... 332
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