DEDUCTION. SO IT CANNOT BE USED AS A DEDUCTION FOR FEDERAL INCOME TAX PURPOSES.
Q SO QUESTION SIX IS REALLY QUESTION FIVE ONLY DONE INDIRECTLY, LOOKING AT THE TRANSACTION AS IF THE CORPORATION WAS ATTEMPTING TO DO IT INDIRECTLY?
A YES.
Q NOW, QUESTION SEVEN, HOW IS THAT RELEVANT?
A QUESTION SEVEN DEALS WITH THE CORPORATION MAKING LOANS, DONATIONS, OR OTHER DISPERSEMENTS DIRECTLY OR INDIRECTLY. AN EXAMPLE, FOR THE BENEFIT OF POLITICAL PARTIES, CANDIDATES, ET CETERA, IF AN INDIVIDUAL ON HIS OWN HAD MADE A DONATION TO A POLITICAL PARTY AND LATER ON HE WAS REIMBURSED BY THE CORPORATION FOR THAT, FOR THAT EXPENSE THAT HE INCURRED, THE CORPORATION WOULD NOT BE ALLOWED TO DEDUCT THAT AS FAR AS FEDERAL INCOME TAXES.
Q SO THAT IS AGAIN ANOTHER INDIRECT METHOD OF WHAT NUMBER FIVE WAS DEALING WITH?
A THAT'S RIGHT.
Q QUESTION EIGHT?
A QUESTION EIGHT GETS INTO ANOTHER AREA AS FAR AS FOREIGN BANK ACCOUNTS. DID ANY CORPORATE OFFICER OR EMPLOYEE OR THIRD PARTY ACTING IN BEHALF OF THE CORPORATION HAVE SIGNATURE OR OTHER AUTHORITY OVER OR CONTROL OVER DISPERSEMENTS FOR FOREIGN BANK ACCOUNTS.
QUESTION EIGHT, WE ARE SEEKING TO FIND OUT IF FOREIGN BANK ACCOUNTS THAT WERE CONTROLLED BY THE CORPORATE EMPLOYEES DID EXIST, AND IF SO WE WOULD LIKE TO, OF COURSE REVIEW THESE BECAUSE THERE IS A GOOD POSSIBILITY THAT UNREPORTED INCOME COULD BE CHANNELLED INTO A FOREIGN BANK ACCOUNT AND WE WOULD NEED TO KNOW ABOUT THAT ACCOUNT TO KNOW IF IT EXISTS.
THE UNREPORTED INCOME, IF DISCOVERED, WOULD BE INCLUDED AND WOULD INCREASE THE TAXABLE INCOME OF THE CORPORATION.
Q NOW, QUESTION NINE?
A QUESTION EIGHT ASKED ABOUT AUTHORITY OVERSEAS. QUESTION NINE ASKED IF THE CORPORATION ACTUALLY MAINTAINED THE ACCOUNT, AND THE SAME REASONS WOULD BE FOR QUESTION NINE IN THE DETECTION OF FOREIGN BANK ACCOUNTS COULD LEAD TO DETECTION OF A SLUSH FUND OR COULD LEAD TO UNREPORTED INCOME BEING CHANNELLED TO THE FOREIGN BANK ACCOUNT.
Q QUESTION TEN, DOES THAT DEAL WITH THE SAME AREA ALSO?
A YES. IT GETS INTO THE AREAS OF DOMESTIC OR FOREIGN, DOMESTIC OR FOREIGN NUMBERED ACCOUNTS OR IN THE NAME OF SOMEONE OTHER THAN THAT OF THE CORPORATION. IN THIS INSTANCE, WHETHER IT BE FOREIGN OR DOMESTIC, IT IS POSSIBLE THAT AN UNREPORTED INCOME COULD BE DEPOSITED IN A NUMBERED ACCOUNT OR IN THE NAME OF ANY OTHER BUSINESS OR PERSON, AND WE NEED TO KNOW THE INFORMATION ABOUT THESE ACCOUNTS SO WE COULD DETERMINE IF THERE WAS UNREPORTED INCOME OR IF IT WERE USED FOR SLUSH FUND PURPOSES OR WHATEVER.
Q SO QUESTIONS EIGHT, NINE, TEN ARE DEALING WITH FOREIGN BANK ACCOUNTS, AND YOU WANT TO KNOW ABOUT THEM SO YOU CAN TAKE A LOOK AND SEE IF THERE WAS ANYTHING UNUSUAL?
A THAT'S CORRECT, AND EACH ONE GOES INTO A DIFFERENT AREA, BUT OVERALL IT IS TO DETERMINE IF THEY ARE IN EXISTENCE.
Q WHY FOREIGN ACCOUNTS, WHY IS THAT A DISTINCTION BETWEEN FOREIGN ACCOUNTS AND DOMESTIC ACCOUNTS, DO YOU HAVE ANY IDEA WHY