EFTA02651896.pdf

From: Barry J. Cohen < Sent: Sunda ,April 30, 2017 6:59 PM To: Cc: Jeffrey Epstein; Tom Turrin; Leon Black Subject: Re: 2012--PRIVILEGED AND CONFIDENTIAL Agree on not giving APO our notice. But is it ok to give them our $884= number? Sent from my iPhone On Apr 30, 2017, at 2:32 PM, <mailto >"< <mailto > wrote: Barry-i don't think we need to give APO our # (or, certainly not the full 2nd noti=e). All we need is, for example, josh h's number and know his and leon's r=lative ownership % of brh in 2012 and the math is simple. I really think the obvious next step is for jeffrey and tom to speak and fo= tom to reach out to the irs again. If that doesn't work, as you say, I th=nk the tax guys--and jeffrey in partic--shld architect the nature of the r=sponse. I'll get the answer tomorrow from EY on jee's question on the potentially prejudicial nature of acknowl=dging a mistake. Sent from my Verizon Wireless BlackBerry From: 'tarry J. Cohen" < <mailto Date: Sun, 30 A r 2017 17:31:57 +0000 To: <mailto <mailto »; Jeff=e E •steinc'eevacation@gmail.c=m <mailto:jeevacation@gmail.com»; Tom Turrin <mailto Cc: Leon Black< <mailto Subject: RE: 2012--PRIVILEGED AND CONFIDENTIAL Here are my observations: 1. The first IRS letter references a "review" of BRH, but doesn&=8217;t suggest that there will be changes to the BRH K-1 items. In f=ct, it implies the opposite. The letter points to the K-1it thinks we should have used (not reflecting any changes from the origina=). It asks what K-1 LDB used because it can't find the BRH K-1 or it= exact numbers on LDB's return. 2. The second IRS lett=r almost suggests the opposite. It is in effect saying that th= original K-1 is wrong. P. 9 of the pdf indicates an adjustment of 5=84,006, referencing 98-054199, which is BRH's TIN; not to mention the p. 10 footnote which mentions=BRH. 3. I'm not sure how the IRS traces this number to the LDB r=turn, as the BRH K-1 was issued to BFP, and was not attached to LDB'= return. LDB's 2012 return references a few items from BRH "via Black Family Partners," so maybe the IRS assumes that LDB=pays taxes attributable to BRH. 4. The IRS seems to be point=ng out 2 different problems in its respective letters: (a) How does =RH income/loss/expense flow to LDB's return, and (b) The origi=al BRH numbers were wrong, and have been changed by EFTA_R1_01894542 EFTA02651896 the IRS. In other words, the first letter i=plicitly asks us to trace specifically mentioned BRH K-1 numbers to LDBL'el7;s return, which the second letter is saying are wrong and have been cha=ged. I want to say that the second letter obviates the=need to respond to the first, because the second letter is says the =irst letter's numbers are wrong. However, the letters are simp=y inconsistent. It would have been very easy for the IRS to withdraw the initial request or issue a clarification, but it d=d not do that. Assuming the agent continues to refuse to return our =alls, I defer to the tax experts re whether "under-responding"=to the first letter creates undue risk of a 9-figure assessment vs. having them come back to us to request more info. I agree with Brad that it would be good to have A=ollo acknowledge that the $884,006 corresponds to their new understanding =f the implicitly revised BRH K-1. To do that, I have to tell them th=s number. Is that ok? Ori inal Messa e From: <mailto > [mailto Sent: Sunday, April 30, 2017 11:33 AM To: Jeffrey Epstein <jeevacatio=@gmail.com <mailto:jeevacation@gmail.com»; Torn Turrin < <mailto »; Barry J. Cohen < <mailto >> Cc: Leon Black < <mailto >> Subject: Guys-can I just mention and confirm some things:<=:p> 1. As an fyi, but as I believe you know, Ft.! is pu=ling together the back-up and presentation on the other items of BRH incom= highlighted in the original IRS notice this week end. Hopefully we will n=t have to submit. 2. As we all know I aint no tax guy but I read th= assessment letter very carefully and my "uninformed" view is ex=ctly tom and jeffrey's first reaction (which may or may not have changed),=ie, that the IRS found/acknowledges of what they believe should be or a delta of 884,006. (They al=o found a delta of 17,680 in itemized deductions.) Definitionally, these n=mbers have to include BRH numbers and as jeffrey said to me, they answered=the question they posed in the initial notice. 3. In that context, my personal view is that tom =ries to reach out by phone monday (after he and jeffrey touch base today o= tomorrow morn to coordinate) to confirm that the 360k assessment is the s=ow stopper. 4. On a parallel basis, I'd have jeffrey an= tom edit the "alternate response letter" which, again, wo=Id set out our belief that the "assessment" ends this process, a= least for 2012. If we don't hear back from the agent then we should submit in writing our understanding of the notice and assessment. 5. As an aside, if leon's brh assessment is 884,0=6 it wld be nice to see if that foots with the overall assessment to the o=her BRH partners and cross-check to ownership %'s; although at the end of =he day I'm not certain that's critical. 2 EFTA_R1_01894543 EFTA02651897 Thgts? I'm reachable by email or cell phone. Best= b Sent from my Verizon Wireless BlackBerry 3 EFTA_R1_01894544 EFTA02651898