From: Kelley Lynch <kelley.lynch.2010@gmail.com>
Date: Sat, Oct 25, 2014 at 5:58 PM
Subject: Re: Traditional Holdings - Richard Westin Letters - March 2002
To: "irs.commissioner" <irs.commissioner@irs.gov>, Washington Field <washington.field@ic.fbi.gov>, ASKDOJ <ASKDOJ@usdoj.gov>, MollyHale <MollyHale@ucia.gov>, nsapao <nsapao@nsa.gov>, fsb <fsb@fsb.ru>, "Doug.Davis" <Doug.Davis@ftb.ca.gov>, Dennis <Dennis@riordan-horgan.com>, rwest0@gmx.com, sedelman <sedelman@gibsondunn.com>, "kevin.prins" <kevin.prins@ryan.com>
Hello IRS,
There are two separate issues with this fax from Ken Cleveland. The letter itself relates to the IRS audit of the charitable gift of stock from Cohen to Mt. Baldy. This related to the 1996 Sony deal. Cohen testified that I hired his representatives. He is a bald-face liar. He worked with Burt Goldstein prior to meeting with me and continued to work with him until 1999. Steve Lindsey recommended Cleveland to Cohen specifically because the IRS audit had to be handled in California. Cohen was delighted with the outcome of the audit and hired Cleveland. He felt it would be easier to deal with an accountant in California.
I have generally transcribed the shorthand notes on the back of this letter. Those notes are from January 2012 and relate to the emails between me and Westin (with Cohen copied in) addressing the issues that Ken Cleveland failed to handle. I had nothing to do with it but Cohen permitted me to pay the penalties and interest. I found that shocking but it proved to me how each of these individuals operated and how, when under pressure or questioned, they would blame one another or me. I advised Cohen in my emails that I handled NONE of these matters, did not deal with IRS matters, accounting, loans or loan documents, corporate matters, Sony 1099s, etc. These shorthand notes show that I advised Westin that the corporate structures were so complicated that I could not deal with them. And I would not deal with them. But now, I have evidently transformed into Mata Hari. Reeve Chudd felt that he was being asked to perform alchemy when Cohen demanded a U.S. tax credit in exchange for donating his body of work (that i archived and Cohen removed from my offices; Ira Nadel had reviewed it carefully and should recall precisely what was in the office I set aside for Cohen; it is documented in Armelle Brusq's Spring 1996 documentary and was not touched.)
My roommate, Linda, just walked in and cannot believe the amount of paperwork I am surrounded by. I am very relieved I spent months, prior to losing everything, scanning documents and evidence for IRS.
All the best,
Kelley
Ken Cleveland Fax to Kelley Lynch dated July 22, 1999
Your July 20, 1999 Fax
Has POA for Leonard in file.
Should have approval from IRS re. Adam’s 1997 taxes by Monday.
Sets forth payment schedule.
Will file extension for the trust [Sabbath Day CRT and Cohen Family CRT] and the individuals until October 15, 1999. Since this is the first year we have done the returns, I would like to have plenty of time to prepare the returns and ask any questions that may arise.
You are correct, the corporate returns are due by September 15. I would appreciate the information by August 15.
I spoke to Steve Infield [Cohen’s accountant at Burt Goldstein’s office; Ken Cleveland was hired specifically to handle the IRS audit of Cohen’s gift of stock to Mt. Baldy; Lindsey recommended him and Cohen was very happy with the results of the audit and decided to hire him and move his accounts from Burt Goldstein]. Steve did not think there was an appraisal. He is going to have Jeff call me and let me know why one was not done. I am not concerned about it since the stock was sold for the same value as the contribution. However, if there is no appraisal, I will need a copy of either the bank statement of Mt. Baldy Zen Center showing the deposit was made or a copy of the cancelled check. [Appraisal issues were handled by Westin, Cohen’s accountants at Goldstein, etc. I was not involved in any way whatsoever.]
.
In reviewing the worksheet sent to you by Steve Infield, I noticed that Sony valued the stock and deducted monies for outstanding liabilities. I asked Steve if this was an advance that Leonard counted as income in prior years and paid tax on. If he didn’t pay tax on it, does he have a note or did he pay interest on the funds to prove to the IRS that it was in fact a “loan” and was not required to be income. Again, Jeff or Paul will call me back tomorrow and let me know.
KL shorthand notes on reverse re. conversation with Westin after Cleveland freaked out in January 2002 about Sony’s $7 million 1099. Reviewed this letter for dates Ken asked to receive information by. This is referred to in my January 11, 2002 email to Cohen and Westin. Westin’s email to Cohen and me advised Cohen to hire a new accountant. Cohen chose not to do so.
RW: Penalty abatement officer.
$277,000 late fee and late payments.
Ken is not pro-active enough.
He needs a good accountant.
KL: The structures have become too complicated for me to handle.
RW: You are trying hard for him.
KL: I turned to Cleveland for instructions and never heard back. [I left messages and heard nothing]. I took my focus off of it. It should have been filed by April 15th. I put them aside.
RW: I don’t think it’s that big of a problem. Maybe [IRS] will permit an extension. Late payment; late filing; interest – 4 to 5%.
NOTE: Although none of this was caused by me Cohen permitted me to pay his penalties and interest. ..