Opinion ID: 3064204
Heading Depth: 2
Heading Rank: 3

Heading: King’s First and Second Returns in August 2004

Text: Only after the IRS investigation began did King file personal returns for tax years 1998 to 2002. These returns (“King’s first returns”) were prepared by Hechtman and filed by King in August 2004. King’s first returns indicated that King owed $88,887 in personal taxes for 1998, $50,218 for 1999, $36,647 for 2000, $29,703 for 2001, and $89,559 for 2002, for a total of $295,014. Hechtman treated both Civil Cadd and CCEC as S- 3 corporations in preparing King’s first returns, passing those corporations’ income through to King in his personal capacity. King’s first returns for 1998 to 2002 were introduced at trial. Later in August 2004, King hired Donald Cook, a new accountant, to “start[] from scratch” with King’s own records to prepare personal returns for tax years 1998 to 2002 (“King’s second returns”). King filed his second returns at various times between 2004 and 2005.2 King’s second returns showed that King owed $50,398 for 1998, $45,165 for 1999, $131,611 for 2000, and $245,916 for 2001, for a total of $473,090. Like Hechtman, Cook treated both Civil Cadd and CCEC as S-corporations in preparing King’s second returns, passing those corporations’ income through to King in his personal capacity. King’s second returns for 1998 to 2001 were introduced at trial. Cook also prepared a second return for year 2002, but it does not appear to be a part of the record at trial.