EFTA02336791.pdf

From: Thomas Turrin < Sent: Sunday, April 30, 2017 10:18 PM To: ; Jeffrey Epstein; Barry Cohen Cc: Leon Black Subject: RE: Please see my comments below in red. Ori inal Messa e From: [mailto <mailto: > ) Sent: Sunday, April 30, 2017 11:33 AM To: Jeffrey Epstein; Thomas Turrin; Barry Cohen Cc: Leon Black Subject: Guys-can I just mention and confirm some things: 1. As an fyi, but as I believe you know, FtJ is pulling together the ba=k-up and presentation on the other items of BRH income highlighted in the =riginal IRS notice this week end. Hopefully we will not have to submit.&nb=p; 2. As we all know I aint no tax guy but I read the assessment letter v=ry carefully and my "uninformed" view is exactly tom and jeffrey=s first reaction (which may or may not have changed), ie, that the IRS&nbs=; found/acknowledges 378,805,695 of what they believe should be 379,707,381 or a delta of 884,006. (They also found a del=a of 17,680 in itemized deductions.) Definitionally, these numbers have to=include BRH numbers and as jeffrey said to me, they answered the question =hey posed in the initial notice. The "delta" in income is not a resu=t of an audit of Leon's tax return. The "delta :=21; is Leon's (BFP's) allocable share of the adjustment=of BRH Holdings, LP ordinary income as a result of an audit of the ta= return of BRH Holdings. The issue is on th= BRH partnership return. Suzan=e Wong (or someone at Apollo or Deloitte) should be able to provide a copy of the IRS audit report explaini=g the adjustment of BRH. I will not be able to speak =o the agent about BRH specifically since I am not the tax preparer of BRH.=/b> When the IRS audits a partnership and makes an =djustment to the partnership's income or deductions, t=e IRS sends adjustment notices to the partners such as the o=e received late Friday in which they indicate the specific partner's allocable share of the partnership adju=tment. The IRS notice also computes the additional tax =nd interest (there was no penalty) related to the adjustment of BRH income. The delta in itemized deductions is strictly du= to the fact that Leon's gross income increased due to the audit adj=stment of BRH Holdings, LP...no other reason. There was no disallowance of Leon's deduc=ions claimed on his personal return. Total gross=income affects the amount of miscellaneous itemized d=ductions subject to the 2% gross income limitation...so the =mount of miscellaneous itemized deductions decreased due to increase in in=ome. ..it's simple limitation calculation.<=div> 3. In that context, my personal view is that tom tries to reach out by=phone monday (after he and jeffrey touch base today or tomorrow morn to co=rdinate) to confirm that the 360k assessment is the show stopper. &nb=p; Brad, I agree with this approach. The 360 assess=ent as a result of the BRH audit in my opinion is the show stopper....=f Leon were to sign off on </=iv> EFTA_R1_01297435 EFTA02336791 adjustment and pay the assessment promptly, tha= is the end of this. 4. On a parallel basis, I'd have jeffrey and torn edit the "=lternate response letter" which, again, would set out our belie= that the "assessment" ends this process, at least for 2012. If re don't hear back from the agent then we should submit in writing our understanding of the notice and assessment. I believe (and so does=font color="red"> my partner Lisa G=Idman) that this notice of adjustment of should "end the process". I can call first thing Monday and confirm (if the agent takes my c=Il). We can discuss=strategy first thing tomorrow. S. As an aside, if leon's brh assessment is 884,006 it wld be nice to =ee if that foots with the overall assessment to the other BRH partners and=cross-check to ownership %'s; although at the end of the day I'm not certa=n that's critical. The audit report issued to BRH Holdings, LP wou=d disclose the reason for the adjustment. <=>lt would be interesting to see whether the audit adjustment is proport=onal to the other founding partners, it should be. Thgts? I'm reachable by email or cell phone. 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