F. Lee Bailey Bankruptcy Rooted In Poor Record Keeping
From the Tax Court decision, I think that might be both true and untrue. The DuBoc debacle is probably why Bailey faced such a big audit covering the years 1993 through 2001. If Bailey had had good accounting done, there would not have been all that much to find, though. There were a host of problems with omitted income and unsubstantiated deductions that have more of the hallmarks of inattention rather than trying to get away with anything.
Tax Court Denies Amway Losses Due To Lack Of Profit Motive
The Tax Court denied the losses because Mr. Hess did not have any sort of a business plan. What he received from Worldwide Group “did not contain information that is generally found in a formal business plan”. It was more of a description of how revenue could grow.
It is interesting to note that the Tax Court has become a little more relaxed in calling for formal business plans in Section 183 cases recognizing that people in essentially crap shoot businesses like art and horse breeding don’t need accountants to tell them how to make money. Yet it seems to be holding the line when it comes to Amway.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.