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[Bob Pickle]

Nick asked Larry Ewing if 3ABN made a profit on books and such. He should have instead asked him if D & L a.k.a. Danny Shelton made a profit.

I say "should have instead asked" only in the sense of Walt Thompson's claim that the purpose of going to court is so that the truth can come out, assuming that 3ABN sued the IL Dept. of Rev. for the same alleged purpose they sued Gailon and me, so that the truth could come out in court under oath.

But given Danny's prevarication when he denied receiving housing and retirement benefits, Walt's claim that taking testimony under oath is somehow a guarantee that the truth will be told is either evidence that he is extremely naive or an accomplice, it seems to me.

[Bob Pickle]

MR. MILLER: Okay.

In your review of the records and the financials did you come across any evidence or indication that any of the revenues of Three Angels went to the personal profit or inurement of a private individual?
 
THE WITNESS: No.

Can someone please explain this one to me? How was Larry Ewing able to answer no when the 2001 financial statement he had at the time of his testimony, a statement he helped prepare, says, "The Organization purchases a portion of their inventory from an entity owned by two board members. Purchases from this entity totaled $75,000.00 for the year ending December 31, 2001."?

Is there some way in which such payments to Danny for such purchases are not considered revenue of 3ABN going to the personal profit or inurement of Danny? Or is $20,000 profit from a sale of $75,000 by Danny to 3ABN not considered personal profit or inurement?

At what point do such sales become personal profit or inurement?

[Snoopy]

Sure.  If the entity receiving the revenues was a legal entity such as a corporation or a partnership, the inurement did not go to a "private individual".  Legal semantics.

MR. MILLER: Okay.

In your review of the records and the financials did you come across any evidence or indication that any of the revenues of Three Angels went to the personal profit or inurement of a private individual?
 
THE WITNESS: No.

Can someone please explain this one to me? How was Larry Ewing able to answer no when the 2001 financial statement he had at the time of his testimony, a statement he helped prepare, says, "The Organization purchases a portion of their inventory from an entity owned by two board members. Purchases from this entity totaled $75,000.00 for the year ending December 31, 2001."?

Is there some way in which such payments to Danny for such purchases are not considered revenue of 3ABN going to the personal profit or inurement of Danny? Or is $20,000 profit from a sale of $75,000 by Danny to 3ABN not considered personal profit or inurement?

At what point do such sales become personal profit or inurement?

[Bob Pickle]

Okay. Now it gets tricky. Danny testified under oath in his affidavit in MN that D & L was a sole proprietorship, and he stated on his 2001 tax return under penalty of perjury that D & L was owned by both he and Linda, which according to the IRS's instructions that year would have made D & L a partnership, since they evenly split the profits between the two of them.

So are you saying that according to the legal semantics, if D & L was a DBA, then it was private inurement, but if it was a partnership, it wasn't?

But if it was a partnership, wouldn't that mean that 3ABN revenue went to personal profits or inurement of two private persons rather than one?

[Snoopy]

I'm saying that if D&L or any other entity that received revenue from 3ABN were a legally formed entity under the laws of the state of its formation as set forth by the appropriate Secretary of State (or its counterpart), then one could probably feel OK about stating that there was no private benefit to a "private individual".

A DBA is not a separate legal entity - it is simply an entity, usually a person(s) "doing business as" a different name.  Thus, Bob Pickle could file a DBA to do business as "Mary Smith".  Any income earned by an individual's DBA would be reported on that individual's personal income tax return (perhaps a joint return) on a Schedule C (or maybe an E) of the Form 1040.

A legally formed partnership would have to file a Schedule K-1 with the IRS.  A corporation would file a Form 1120.  So, revenue accruing to a DBA or private individual(s) would be reported under the individual(s) social security number(s), while revenue accruing to a legal partnership or corporation would be reported under the employer identification number.

Okay. Now it gets tricky. Danny testified under oath in his affidavit in MN that D & L was a sole proprietorship, and he stated on his 2001 tax return under penalty of perjury that D & L was owned by both he and Linda, which according to the IRS's instructions that year would have made D & L a partnership, since they evenly split the profits between the two of them.

So are you saying that according to the legal semantics, if D & L was a DBA, then it was private inurement, but if it was a partnership, it wasn't?

But if it was a partnership, wouldn't that mean that 3ABN revenue went to personal profits or inurement of two private persons rather than one?

[Bob Pickle]

It appears to me that in 2001, D & L was a "DBA" of both Danny and Linda, and thus wasn't a separate legal entity.

[Snoopy]

Sounds like private benefit or personal inurement to me.

NOTE:  I am not an attorney and am not offering legal advice.  Anyone feeling the need for legal advice should consult a licensed attorney!!!!

[Gailon Arthur Joy]

MR. MILLER: Okay.

In your review of the records and the financials did you come across any evidence or indication that any of the revenues of Three Angels went to the personal profit or inurement of a private individual?
 
THE WITNESS: No.

Can someone please explain this one to me? How was Larry Ewing able to answer no when the 2001 financial statement he had at the time of his testimony, a statement he helped prepare, says, "The Organization purchases a portion of their inventory from an entity owned by two board members. Purchases from this entity totaled $75,000.00 for the year ending December 31, 2001."?

Is there some way in which such payments to Danny for such purchases are not considered revenue of 3ABN going to the personal profit or inurement of Danny? Or is $20,000 profit from a sale of $75,000 by Danny to 3ABN not considered personal profit or inurement?

At what point do such sales become personal profit or inurement?

I would be much more interested in how he viewed all those advances to Danny that the board did not require documentation for, according to sources? And the use of the credit card?

Gailon Arthur Joy

[Gailon Arthur Joy]

I'm saying that if D&L or any other entity that received revenue from 3ABN were a legally formed entity under the laws of the state of its formation as set forth by the appropriate Secretary of State (or its counterpart), then one could probably feel OK about stating that there was no private benefit to a "private individual".

A DBA is not a separate legal entity - it is simply an entity, usually a person(s) "doing business as" a different name.  Thus, Bob Pickle could file a DBA to do business as "Mary Smith".  Any income earned by an individual's DBA would be reported on that individual's personal income tax return (perhaps a joint return) on a Schedule C (or maybe an E) of the Form 1040.

A legally formed partnership would have to file a Schedule K-1 with the IRS.  A corporation would file a Form 1120.  So, revenue accruing to a DBA or private individual(s) would be reported under the individual(s) social security number(s), while revenue accruing to a legal partnership or corporation would be reported under the employer identification number.

Okay. Now it gets tricky. Danny testified under oath in his affidavit in MN that D & L was a sole proprietorship, and he stated on his 2001 tax return under penalty of perjury that D & L was owned by both he and Linda, which according to the IRS's instructions that year would have made D & L a partnership, since they evenly split the profits between the two of them.

So are you saying that according to the legal semantics, if D & L was a DBA, then it was private inurement, but if it was a partnership, it wasn't?

But if it was a partnership, wouldn't that mean that 3ABN revenue went to personal profits or inurement of two private persons rather than one?

You know, Snoopy has a point: where was the K-1 for that year to Linda? Guess she just didn't qualify as a real partner? Or did he just conveniently forget to give Linda her share?

And didn't that seem to be the perpetual trend until Danny simply absorbed the assets of D&L into DLS Publishing, Inc in late November, 2004, including all the book copyrights? Do you think he just forgot to put these on the Divorce Court Affidavit in 2005? What really hapened here? Any suggestions?

Gailon Arthur Joy

Gailon Arthur Joy

[Gailon Arthur Joy]

Sounds like private benefit or personal inurement to me.

NOTE:  I am not an attorney and am not offering legal advice.  Anyone feeling the need for legal advice should consult a licensed attorney!!!!

Are you suggesting that Danny may need legal advice? Is it possible he had it and simply ignored it or more likely implemented it by setting up a new corporation hoping no-one would notice the old D&L publishing assets had disappeared over the hill?

Anyone recall if Linda's seperation agreement included any royalties or mention of it? I certainly do not recall any and since she testified she didn't get royalties, does that mean she had no idea there would be royalties due to her?

Gailon Arthur Joy

[Gailon Arthur Joy]

Here is a much more important question: Just how much of this did Miller know about and when? And did he help DLS in any way with this royalty process?

Now Grandma Nettie, can you help us out with an answer to this question?

Gailon Arthur Joy

[Bob Pickle]

You know, Snoopy has a point: where was the K-1 for that year to Linda? Guess she just didn't qualify as a real partner? Or did he just conveniently forget to give Linda her share?

For 2001 he reported all income for D & L on a Sched C., which the rules for that year state should not have been done. Then he took the profits and split them 50/50, reporting each half on separate Sched. SE's, one for him and one for Linda.

[inga]

... assuming that 3ABN sued the IL Dept. of Rev. for the same alleged purpose they sued Gailon and me, so that the truth could come out in court under oath.

3ABN sued the IL Dept. of Revenue??

[Bob Pickle]

Yes. See the caption of the case posted at http://www.save-3abn.com/3abn-property-tax-appeal-decision-03-31-08.htm.

So 3ABN sued the IL DoR in Circuit Court, since 3ABN is listed as a plaintiff and the DoR is listed as a defendant.

Gailon, if Danny never wanted to really sue anyone but only threatened, lest his operation come under judicial scrutiny, why did he go along with suing the IL DoR? That doesn't quite make sense, does it?

[Gailon Arthur Joy]

The original hearing was an administrative hearing before the Illinois Dept of Revenue regarding the real estate tax exemption and would have been Thompsonville et al vs 3ABN. They lost this case and opted to appeal the decision de novo to the Illinois Circuit Court and that woud have reversed the masthead as part of the appeal procedure.  That is why it is 3ABN vs DOR, et al.

To the degree that an appeal de novo would constitute a lawsuite, rather than a simple appeal on technical grounds, they have certainly opted to challenge the Illinois DOR, et al.

Gailon Arthur Joy