Saturday, November 29, 2014

Kelley Lynch Emails To IRS & Leonard Cohen's Lawyer: Would LAPD's TMU Be Willing To Assist With A Corporate Record & Tax Return Inspection?

From: Kelley Lynch <>
Date: Sat, Nov 29, 2014 at 1:29 PM
Subject: Re: Corporate Federal Tax Matters
To: IRS cc:  Jeffrey Korn & Multiple Recipients


I'm clear about this:  Dissolution under state law or lack thereof will not be controlling for federal tax purposes. Intent coupled with actual distributions to the shareholders are the usual determining elements.

I'm not clear about the dissolution or liquidation of these entities.  I thought perhaps Cohen might want to involve LAPD's TMU.

All the best,

On Sat, Nov 29, 2014 at 1:28 PM, Kelley Lynch <> wrote:


I have provided you with a formal corporate records inspection request.  That request involved inspecting tax returns.  I do not know if the corporate entities (BMT, TH, and Old Ideas, LLC) were dissolved or liquidated by LA Superior Court's order.  Dissolution under state law is not controlling for federal tax purposes.  It seems impossible that a Court ruled that Cohen has no tax obligations or responsibilities.  When did these entities cease to exist; how did LA Superior Court envision unwinding them and who was to file final federal and state tax returns; how did the Court value the intellectual property assets owned by BMT and Old Ideas; how did the Court value the commissions due me for services rendered; and where are those corporate stock valuations?  Did the Court take a legal position with respect to the previously filed federal tax returns?  Why does Ken Freeman believe I was included on federal tax returns prepared by your client's representatives.  As your client should know (and I put this in writing and Westin confirmed it), I did not handle IRS matters, corporate matters, accounting matters, loan documents, etc.  

I didn't receive a 1099 or K-1 from these entities for the year 2005 or onward.  I have illegal K-1s from LCI for 2003, 2004, and 2005.  Did LA Superior Court assign me an ownership interest in LCI that I am unaware of?  Is something that Richard Westin rectified?  These documents were transmitted to IRS and State of Kentucky showing $0 income for 2003, 2004, and 2005 while the fraud ledger shows income.

Has Cohen now changed his mind re. the emails in my possession confirming a commission I allegedly received in 2004 re. royalties deposited into his personal account (assets owned by BMT)?  Has he decided that compensating me was also embezzlement?  Does your client's definition of theft involve paying his representatives?  Is that where the disconnect might lie?  What is your client's position re. all corporate books, records, stock units, notarized agreements and other understandings, and the federal tax returns?  Was it all one mistake and the only real understanding was that he would receive an annuity?  He received in excess of nearly $2 million (above the annuity obligation).  I do not see TH corporate tax returns addressing Cohen's approximately $6.7 million in loans and the interest of approximately $4 million due at this time.  I didn't handle tax matters, IRS matters, or loans/documents and was very clear about that fact in my January 2002 email to Cohen and Westin.  Westin confirmed the content of that email and we both felt Cohen should replace his accountant.  It was not an attack.  

I would like answers to these questions.  If Cohen would prefer, I can phone Jeff Dunn of LAPD's TMU and ask if we can meet in their offices or if he can join me in inspecting the books, records, and tax returns.  Perhaps Jeff Dunn can figure out where the assets have gone and explain why a fraud restraining order prohibits me from requesting and receiving federal tax and corporate information?  He should read the Supremacy Clause first and understand that state law doesn't control federal tax matters.  Let me know if LAPD's celebrity unit can be of assistance here.  I know Cohen's able to summon them and come up with a garbage story about a disgruntled woman who wants to attend his concert.  That's a misogynist's theory.

Kelley Lynch  (12-01-2004)
Definition of "Complete Liquidation"

  1. "Complete liquidation" is a term not defined by the Code. The regulations under IRC section 332 suggest that the status of liquidation exists when the corporation ceases to be a going concern and its activities are merely for the purpose of winding up its affairs, paying its debts, and distributing any remaining balance to its shareholders. The Tax Court applies a three-pronged test to determine whether a complete liquidation has taken place (see Joseph Olmstead v. Commissioner T.C. Memo 1984-381): 
    • Was there a manifest intent to liquidate?
    • Was there a continuing purpose to terminate corporate affairs and dissolve?
    • Were the corporate activities directed and confined to that purpose? 
  1. Dissolution under state law or lack thereof will not be controlling for federal tax purposes. Intent coupled with actual distributions to the shareholders are the usual determining elements. 
  1. IRC section 346(a) allows for a series of distributions pursuant to a plan of liquidation to be treated as being part of a complete liquidation. If the plan is not formal or is ambiguous, there may be uncertainty as to which distributions are made pursuant to the plan. Distributions made before there is evidence to support an intention to liquidate should be taxable as dividends (ordinary income to a shareholder). 
  1. The U.S. Tax Court's decision in Pittsburgh Realty Investment Trust v. Commissioner, 67 T.C. 260, 1976, shed some light on a corporate liquidation. The Court stated that:
    1. The determination as to whether and/or when a corporation has liquidated is a question of fact. Proof of a distribution in complete liquidation not only depends on an intent to liquidate but also requires acts which demonstrate and effect that intent. 
    1. A corporation in existence during any portion of a taxable year is required to make a return. If a corporation was not in existence throughout an annual accounting period (either calendar year or fiscal year), the corporation is required to make a return for that fractional part of a year during which it was in existence. A corporation is not in existence after it ceases business and dissolves, retaining no assets, whether or not under State law it may thereafter be treated as continuing as a corporation for certain limited purposes connected with winding up its affairs, such as for the purposes of suing and being sued. If the corporation has valuable claims for which it will bring suit during this period, it has retained assets and therefore continues to exist. A corporation does not go out of existence if it is turned over to receivers or trustees who continue to operate it.