-159-
Kanter reached a similar agreement with Lisle to discharge
his debt to IRA. Originally, pursuant to certain payment
negotiations Kanter and Lisle had in 1989, Lisle agreed to pay
the debt in 2 years. He failed to do so, and he and Kanter
discussed the matter again, until Lisle, at some point, agreed to
pay the debt by the end of 1993. However, Lisle died before
making any payment, and Kanter, acting on behalf of IRA, filed a
claim against Lisle’s estate.
Beginning in about 1990, Ballard was paid a salary by TMT,
and Lisle was paid a salary by Carlco. Kanter, who was now IRA’s
president, agreed to have each of these IRA subsidiaries pay a
salary to Ballard and Lisle. Ballard had requested that TMT pay
him a salary. At various times from 1987 through 1989, some of
Ballard’s family trusts had also received loans from TMT in order
to make certain real estate investments.
IV. Additional Findings of Fact: The Flow of Funds
Other than the limited discussion concerning loans to
Ballard and Lisle and their family trusts set forth above, the
STJ report did not include an analysis of the flow of funds that
respondent offered as further proof that the payments from The
Five constituted income earned by and properly taxable to Kanter,
Ballard, and Lisle. The following additional findings of fact
focus on the payments from The Five to IRA, THC, and other
Kanter-related entities and how those funds were transferred to
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