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Jeffrey Galante prepared this package to the IRS for one of our clients who was wrongly assessed by a church due to their bookkeeping.

Attachment to Form 3949 A

Kevin K******

Section 5 a. Comments:

M****** Community Church, a Texas 501(c)(3) non-profit corporation issued a false Form 1099-Misc reporting to the IRS that I received Non-employee compensation in the amount of $265,619.00 in tax year ended 12/31/2005.  The IRS assessed additional taxes, interest, and penalties on my form 1040, as a result of my not reporting the alleged Non-employee compensation.

At no time did M****** Community Church or I consider the proceeds as Non-employee compensation.  Instead, the monies I received were actually loan proceeds from M****** Community Church to me in 2005.

I have repeatedly notified M******Community Church that the Form 1099-Misc they issued did not properly report that the $265,619.00 I received was loan proceeds, that the document was false, and that it needed to be retracted.  M****** Community Church has repeatedly refused to withdraw the false Form 1099-Misc, even though they know that the monies I received were loan proceeds and not Non-employee compensation.

In fact, M****** Community Church has entering into a Compromise Settlement Agreement with me dated September 28, 2009, which acknowledged the existence of the loan from M****** Community Church to me.  The attached copy of the Compromise Settlement Agreement states, in part that, “Whereas, Kevin K****** currently owes an amount of money to the Church in the amount of Two Hundred Sixty-Five Thousand Six Hundred Nineteen Dollars and Ninety cents ($265,619.90), evidenced by the Form 1099 filed with the Internal Revenue Service by the Church in 2005.”

I believe that the M****** Community Church may have inappropriately deducted on their 2005 tax return, the $265,619.90 as Non-employee compensation allegedly paid to me, instead of correctly treating the proceeds as a loan to me.  In the above referenced document, the M****** Church admits that I owe the church $265, 619.90, rather than the monies being Non-employee compensation.

For your ready reference, the name and current address of Mid-Cities Community Church is:

M****** Community Church

**** ******* ******

*****, ** *****

The Church’s address as listed on the Form 1099-Misc is:

***** ** ***** ******

*****,** ****

The M****** Community Church’s Administrator /Associate Pastor is Chris K******.

I also believe that M****** Community Church may have wanted to further its IRS deception by not properly acknowledging in the Compromise Settlement Agreement that M****** Community Church has the authority and responsibility to notify the IRS regarding an incorrectly filed Form 1099-Misc.  I was made aware of M****** Community Church’s responsibility only after I signed the agreement.

For your further consideration, please note that M****** Community Church relies upon Donald G******, C.P.A. for its tax advice.

A brief background taken from the company’s website (www.g******.com) states that, “Donald G****** graduated from Midwestern State University in l977 with an accounting degree. His employment history includes more than four years as a revenue agent with the Internal Revenue Service specializing in personal and corporate income tax issues. For three years he served as Senior Vice President of Finance for an independent oil and gas company, as well as completing four year’s experience as a securities broker with S****** Securities. Don joined our firm in l992 as a staff accountant. Currently he manages the tax department providing a wealth of tax, accounting, investment and IRS compliance knowledge. His expertise is exceptional in representation of our clients in IRS matters.

Donald G****** is employed by:

G******, S****** & Company
**** ***** *****
*****, ***** ***** 

I and my representative have repeatedly tried to have the IRS reverse its prior, incorrect assessment of taxes, penalties and interest against me, that were based upon the false Form 1099-Misc that was filed by M****** Community Church. 

I request that the IRS fully investigate this matter, reverse the erroneous assessment against me, and to assess against M****** Community Church any fines or assessments that are appropriate. 

Please contact me, if you need any additional information.