Estate of Burton W. Kanter, Deceased, Joshua S. Kanter, Executor, and Naomi R. Kanter, et al. - Page 233

                                                -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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