-302-
discussed above, IRA and THC did not serve any legitimate
business purpose with regard to the transactions in dispute.
Rather than engage in substantial business activities, IRA and
THC served as nothing more than conduits and shams to collect and
distribute payments that represented income taxable to Kanter and
Ballard. Similarly, TMT and BWK were entities created to conceal
the true nature of the payments remitted by The Five to Kanter
and Ballard. Kanter and Ballard owned and controlled BWK and
TMT, respectively. These entities were the repositories of their
income. Ballard used IRA, and later TMT, as nominees to receive
and hold his income. Likewise, entities such as KWJ Partnership
and Essex Partnership were used as conduits solely to conceal the
nature of the income and disguise the transfer of funds to Kanter
and Ballard and members of their families.
D. Reporting Kanter’s and Ballard’s Income on IRA’s and
THC’s Tax Returns
Kanter and Ballard reported their income on IRA’s tax
returns. Kanter also reported some of his income on THC’s tax
returns. Income was reported on IRA’s and THC’s returns to
create the appearance that those entities earned the income,
rather than Kanter and Ballard. Moreover, those corporations
paid very little in taxes. Later, Kanter and Ballard reported
income that they earned on the Hyatt Corp. transaction and the
Eulich/Essex Partnership transaction on the returns of TMT and
BWK.
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