Form St 04-21 - Recommendation For Decision (Page 3 of 7) in pdf

Form St 04-21 - Recommendation For Decision Page 3

Taxpayer resigned his position at XYZ on January 12, 2000 when he

purchased *****, a wholly owned subsidiary of XYZ that it acquired in

November of 1995. Tr. pp. 22-23.

10.

XYZ was a holding company that had no books or accounting records because

it had no transactions. Tr. p. 18.

11.

ABC was founded in 1929. It holds over 300 lighting patents and offers more

than 1,300 types of value-added specialty lamps, including the 15,000-watt

liquid-cooled xenon lamps used in IMAX projectors.

Id.

12.

Under date of February 21, 2000, Taxpayer filed written letters of resignation

as a corporate director and officer with the boards of directors of XYZ

International, ABC, and the rest of the subsidiary corporations of XYZ

International by telecopier and mail. Tr. pp. 19-22, Taxpayer Exs. No. 2, 3,

and 4.

13.

In August 1999, XYZ International was in default of its loan from Money

Capital Corporation (“Money Capital”). Tr. p. 16.

14.

Under date of March 23, 2000, XYZ International and Money Capital signed

an agreement acknowledging that ABC intended to file a voluntary

bankruptcy petition under Chapter 7 of the U.S. Bankruptcy Code. Tr. p. 25-

27, Taxpayer Ex. No. 5.

15.

Taxpayer became aware of ABC’s bankruptcy filing in March of 2000 when

Money Capital requested the budget for ABC. Tr. p. 25.

An IMAX projector is a motion picture projector used in IMAX theaters. IMAX theaters have much

larger projection screens than do standard motion picture theaters.

Form St 04-21 - Recommendation For Decision Page 3