Definitely not an expert either and don't want to sound like a "defender" of the "company" ('cause I don't think there is a company here), but it looks like the $120k got "added" to what he is "owed" & not actually "paid"?
One of the many unpleasant things that jumped out to me is the non-reporting of "foreign business/bank" stuff. Whatever that is, sounds creepy, including the potential $50k penalty:
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The Company did not file its U.S. federal income tax returns, including, without limitation, information returns on Internal Revenue Service (“IRS”) Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations for the years ended December 31, 2007 through 2019. Failure to furnish any information with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to certain civil penalties.
The Company did not file the information reports for the years ended December 31, 2007 through 2019 concerning its interest in foreign bank accounts on TDF 90-22.1, “Report of Foreign Bank and Financial Accounts” (“FBARs”). For not complying with the FBAR reporting and recordkeeping requirements, the Company is potentially subject to civil penalties up to $10,000 for each of its foreign bank accounts. During the year ended December 31, 2019, the Company accrued $50,000 on potential penalty for failure to file the form TDF 90-22.1. In addition, because the Company did not generate any income in the United States or otherwise have any U.S. taxable income, the Company does not believe that it owes U.S. federal income taxes in respect to any transactions that the Company or any of its subsidiaries may have engaged in through December 31, 2019. However, there can be no assurance that the IRS will agree with the position, and therefore the Company ultimately could be held liable for U.S. federal income taxes, interest and penalties.
