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appropriate client accounts. TACI issued annual tax statements
and reports to its clients and the Internal Revenue Service on
the interest income earned by each client on that client’s funds
in the TACI Special E Account and the TACI Special Account.
Kanter, as a client of TACI, had funds of his own in both
the TACI Special E Account and the TACI Special Account. TACI,
as part of its services and acting on Kanter’s behalf, paid some
of Kanter’s business and personal expenses out of Kanter’s funds
in these accounts. All checks issued by TACI on behalf of a
client were debited against the balance such client had in the
accounts. If a client had a negative balance in the accounts,
that debit amount was considered an indebtedness by the client to
TACI. Any positive balance a client had in the accounts was
considered money belonging and owed to said client.
Included among the services provided by TACI were
bookkeeping services for its clients. This included keeping
books and records for clients and the preparation of individual
income tax returns. TACI prepared Kanter’s income tax returns
for all or some of the years at issue.
TACI’s offices were located either at the law firm offices
of Kanter or in close proximity thereto.
Meyers, who was president of TACI, directed the staff and
employees of TACI until 1985. Linda Gallenberger (Gallenberger),
a C.P.A., became vice president of TACI in 1982 and worked under
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