US TAX COURT gras US TAX COURTRECEIVED y % eFILED

DRC sU S

SEP 8 2015 * SEP 8 20153:13 PM

KELLEY ANN LYNCH

Petitioner(s)ELECTRONICALLY FILED

v- Docket No. 17085-15

COMMISSIONER OF INTERNAL REVENUE,

Respondent

REPORT

SERVED Sep 08 2015

UNITED STATES TAX COURTWASHINGTON DC 20217

KELLEY ANN LYNCH

Petitioner ELECTRONICALLY FILEDvs.

Docket No. 17085-15

COMMISSIONER OF INTERNAL REVENUE

Respondent

ADDENDUM TO PETITIONER'SMOTION TO SUPPLEMENT THE RECORD

Petitioner Kelley Lynch hereby respectfully moves this Court to supplement the record in the above

referenced case with this motion and the evidence attached hereto and made a part hereof in Exhibit

A.

Lynch has reported Gianelli's conduct to IRS, FBI, and DOJ as it relates to her, her sons and sister,

Paulette Brandt and others. This conduct has been ongoing since Stephen Gianelli heard from

Leonard Cohen's lawyer, Michelle Rice, in or around May 2009. It has been coordinated with other

individuals. Those individuals would include, but are not limited to, Michelle Blaine (Phil Spector's

former assistant) and Susanne Walsh (Leonard Cohen's fan). The harassment now extends to this

Tax Court Petition. Stephen Gianelli has also publicly stated that he contacted IRS Agent Luis

Tejeda, Los Angeles, California and transmitted fraudulent information to Internal Revenue Service

about Kelley Lynch. This individual, while evidently serving as Leonard Cohen's proxy, is not a

party to any matter involving Kelley Lynch and/or Leonard Cohen. He has not entered a formal

entry of appearance in any of these matters. That would include this Tax Court matter, all matters

before LA Superior Court, the District Court in Colorado, and/or the Central District Court in

California. See Los Angeles Superior Court Case No. BC338322, Los Angeles Superior Court Case

No. BQ 033717, Los Angeles Superior Court Case No. BS099650, United States District Court

(District of Colorado) Case No.1:05-cv-01233-LTB, United States District Court (Central District of

California) Case No. 2:05-cv-06047, and Boulder Combined Court Case No. C0072008C.

Natural Wealth's lawsuit details some of the tactics used against Kelley Lynch by Leonard Cohen

and his legal representative, Robert Kory. Lynch's sons, John Rutger Penick and Ray Charles

Lindsey, have addressed some of this criminal harassment - including as it relates to Stephen

Gianelli - and the tactics themselves in their declarations that have been submitted to this Court.

See Declarations ofJohn Rutger Penick and Ray Charles Lindsey submitted to this Court.

Stephen Gianelli, who Lynch does not know, is obsessed with her blog

(riverdeepbook.blogspot.com) and the matters presently before LA Superior Court, the Appellate

Division, and Tax Court. He has informed Lynch that he worked with the City Attorney of Los

Angeles on at least two occasions to Lynch falsely arrested. Lynch believes this Court should

understand that the City Attorney argued that she was not in possession of IRS required tax and

corporate information and the tax matters are a ruse. The Tax Court should take into consideration

the fact that Cohen and his representatives failed to report the 2001 income from the Sony sale to

Internal Revenue Service. This matter was confirmed in Robert Kory's January 2005 memorandum

to Lynch's lawyers. Cohen's entirely fabricated and fraudulent Complaint (Los Angeles Superior

Court Case No. BC338322) confirms that they failed to file state tax returns. That would more than

likely be their motive for the tactics they have used against Kelley Lynch. Lynch believes this entire

situation was pre-meditated in 2002 when Sony issued the inadvertent $1 million and $7 million

1099s to Leonard Cohen (Sony/Traditional Holdings, LLC deal) and IRS inquired about the $1

million deposit that is at issue in this Tax Court matter. It is Lynch's understanding that the alleged

evidence the "informant" brought to Cohen's attention was her July 25, 2004 letter to the Chief

Trial Counsel's office. See Exhibit B.

Excerpt - Natural Wealth June 2005 lawsuit (Case No.1:05-cv-01233-LTB):

Impact on all parties of Traditional Holdings failure to report sale to Sony, or manner in which saletreated (delta of $5 million basis and $8 million sale price may be consumed in fees paid to third

parties).

145. When these tactics to draw Lynch into his extortion scheme proved futile, Cohen

and Kory - according to Lynch - turned to far more aggressive means to obtain her cooperation.

Indeed, as heard by other witnesses, Cohen and Kory vowed to "crush her," and planned to use

restraining orders and other means to prevent her from serving as a credible witness regarding

both Cohen's affairs and in regard to the scheme into which they had tried without success todraw her.

146. Consistent with that vow and plan, and according to Lynch and other witnesses,

and on information and belief, Cohen and Kory's tactics to terrorize, silence, or disparage Lynchhave included, inter alia, the following:

a. contacting City National Bank, where Lynch, Lynch's son, and Lynch's father, all had personal

banking accounts, and convincing City National Bank to put a freeze on all three of their accounts;

b. alleging that Lynch's father and mother were depositing funds for Lynch in secret offshore bank

accounts, even while, in fact, Lynch's mother was suffering from Alzheimer's and had moved toTexas to be in the care of her other daughter in light of Lynch's precarious financial circumstances;

c. threatening Lynch that she would go to jail if she did not cooperate, and having her younger son's

father, Steve Lindsay, who was also Cohen's record producer, repeat these threats in the child'spresence;

d. threatening to "go to child services," encouraging Steve Lindsay to file legal action to remove

Lynch's younger (and his) son from her custody, and submitting affidavits (from Kory and

Superfon) supporting that effort;

e. in a coordinated fashion with Lindsay's child custody petition, encouraging or directing Steve

Lindsay to call in a warning to the LAPD (not related to Traditional Holdings, but on some other,

unknown pretext) that caused a police team to descend, guns drawn, on Lynch's home, resulting inher being handcuffed and taken involuntarily, in her bathing suit, to a hospital psychiatric ward and

medicated without her consent, before being released the next day, during which time Kory

attempted to persuade Lynch's older son, Rutger, to sell Lynch's house and provide $3 million; and

WHEREFORE, Petitioner requests that this motion, requesting an investigation into Stephen

Gianelli's potential communications with IRS Chief Trial Counsel's Office, be investigated by this

Court and any recordings of Stephen Gianelli's communications with the Chief Trial Counsel's

Office in Los Angeles, California - as it relates to this Petition or Kelley Lynch - be preserved as

evidence of the ongoing harassment, witness tampering, intimidation tactics, and his role as a proxy,

agent provocateur, and/or infiltrator.

Dated: 8 September 2015

Signed Kelley Lynch

Kelley Lynch

EXHIBIT A

From: Stephen Gianelli <stephengianelli@gmail.com>Date: Tue, Sep 8, 2015 at 4:14 AMSubject:

To: Kelley Lynch <kelley.lynch.2010@gmail.com>

Wrong again!

I didn't say that I had no discussions with the Office of the Chief Trial Counsel. I said those

discussions were not about taxpayer information OR your pending tax court petition.

Nor did I say that the discussions were extensive.

They were nevertheless sufficient to form an impression about the courtesy and collegiality of

opposing counsel in your matter.

Sent from my BlackBerry 10 smartphone.

From: Stephen R. Gianelli <stephengianelli@gmail.com>Date: Mon, Sep 7, 2015 at 10:20 PMSubject: Kelley Lynch email dated Mon, Sep 7, 2015 at 4:12 PMTo: kelley.lynch.2010@gmail.com

Cc: BlindDistribution@gmail.com

Ms. Lynch,

You still don't get it.

Contrary to your malice fueled speculation to the contrary, I have not telephoned the "Chief Trial

Counsel's Office" at a "Washington DC IP address" or otherwise. Nor did I ever say that I did.

Someone from the IRS (no doubt) clicked on one of the many links to your blog that you are

constantly emailing to the IRS in one of your daily mass emails - a ritual you have been observing

for ten years. That means only that whoever looked at your blog was able to quickly ascertain that you

are a crackpot, just as every analytical person who has looked at your blog has been able to see at a

glance. The only persons who buy your nonsense are brain addled and substance abusing people likeyour former roommate Linda Carol - whom (true to your pattern) you have now viciously turned

on and the other airheaded people you seem to temporarily attract as followers until even they start

questmg your story.

As for my "axe to grind", I was the wrong person for you to falsely and maliciously accuse of felony

offenses in over then thousand mass emails republished on your blogs since April of 2009. This

malicious conduct on your part caused me to take an interest in looking into your legal claims about

others and debunking your malicious lies that are published daily in mass emails and on your blogs.

Whether you chose to disregard this logical explanation or not in favor of some wacky conspiracytheory I could not care less.

All I know is this: I predicted in 2010 that your (belated) motion to vacate in BC338322 would be

denied - it was. I predicted that you would be arrested, tried, convicted and jailed for criminal

harassment and violating the Colorado protection order - you were. I predicted your appeal and

your habeas petition challenging your 2012 criminal conviction would both be rejected, and for the

precise reasons I put in writing they were. I predicted that you would be returned to jail for

probation violations, including your email harassment of your trial prosecutor Sandra Jo Streeter. InJanuary of 2014 you were. I predicted that your SECOND motion to vacate filed in BC338322

would be denied, because the rules of procedure preclude "two bites at the apple" and for that

precise reason your second motion asking that the court enter an order vacating the 2006 default

judgment entered in BC338322 was denied on June 23, 2015. I also predicted in 2014 that your

threatened motion to "vacate" the May, 2011 California registration of the 2008 Colorado protection

order would be denied, and it was denied on September 1, 2015 for precisely the reasons I put in

wntmg.

I have also predicted that your pending motion objecting to the renewal of the default judgment

(which tries to raise the alleged lack of service of process A THIRD TIME) would be denied. It will

be on October 6, 2015 and Cohen's pending motion for sanctions will also be granted at that time.And I have predicted that your tax court petition would be dismissed for lack of jurisdiction. It will

be.

When are you going to learn that my legal assessments of your preposterous and self-serving legalpositions and defenses are ALWAYS spot-on?

One would assume that you are NEVER going to learn. But that is hardly my problem, is it?

Very truly yours,

Stephen R. GianelliAttorney-at-Law (ret.)

Crete, Greece

From: Kelley Lynch < >Date: Mon, Sep 7, 2015 at 4:12 PMSubject: Fwd: Kelley Lynch blogposted email dated Mon, Sep 7, 2015 at 12:53 PMTo: "*IRS.Commisioner" <*IRS.Commisioner@irs.gov>, Washington Field

< », ASKDOJ <r_\SKDRJ@usdol.gpoy>, "Division, Criminal"< >, "Doug.Davis" <Doug.Davis@ftb.ca.gov>, Dennis< >, MollyHale <MollyHale@ucia.gov>, nsapao <n_sap_ao@ns_aa.gov>,

fsb <fsb fsb rru>, rbyucaipa <rbyucaipa@,yahoo.corn>, khuvane <kMa.com>, blourd<b_lgurd caa m>, Robert MacMillan < >, a

< >, wennermedia < >, Mick Brown

<n_lick±rown teleegrap_h co.uk>, "glenn.greenwald" < », Harriet

Ryan < >, "hailey.branson"<½>,Stan Garnett

< >, Mike Feuer<h>,"mayor.garcetti"< », Opla-pd-los-occ <OPLA-PD-LOS-OCC@,ice.dhs.gov>,

"Kelly.Sopko"<h>,Whistleblower<hr_ep_senagggv>, Attacheottawa <AttacheOttawa@ci.irs.gov>, tip_s@radarnnlinsggn

IRS,

Apart from the Criminal Stalker's pathetic excuses, it doesn't make sense that he would call the Chief

Trial Counsel's Office re. an IRS Washington, DC IP address. My Tax Court Petition has nothingto do with the allegations that Cohen committed criminal tax fraud that I reported to IRS

Commissioner's Staff and many others. I have also provided IRS with an abundance of evidence.

In any event, Gianelli has some type of personal axe to grind here and we know he is a chronic and

pathological liar. He uses this M.O. to infiltrate matters. See his communications with Bruce

Cutler. Only an idiot would believe his lies about that situation. In any event, I have been clear - he

should feel free to marry Cutler.

Right now - Gianeli's focus is on my Tax Court Petition and all Cohen-related LA Superior Court

fraud/perjury matters. I will also contact the IRS Chief Trial Counsel's office about these harassingemails.

From: Stephen R. Gianelli <stephengianelli@gmail.com>

Date: Mon, Sep 7, 2015 at 2:29 PM

Subject: Kelley Lynch blogposted email dated Mon, Sep 7, 2015 at 12:53 PM

To: kelley.lynch.2010@gmail.com

Cc: BlindDistribution@gmail.com

Ms. Lynch,

There you go (again) confusing speculation and malicious wishful thinking with fact.

I never said that I "discussed" your tax court petition with the IRS. Nor did I ever have any such

discussion.

You wrote to me that the IRS was "reading about" me on your blog, and cut and pasted the activity

log on your blog showing that someone using an IRS IP address was on your blog. You implied thatI was in trouble or should be worried.

I replied "not to worry" and that "I get along with the office Chief Trial counsel just fine" and that

the lawyer representing the IRS in opposition to your tax court petition was a "nice guy" - all ofwhich is true, not of which states that any taxpayer information was discussed at any time.

This is not "rotten logic" it is fact - as is your 10-year pattern of making unfounded, serious

accusations of misconduct against people you bear grudges against without any facts to support

those accusations.

In addition, tax court proceedings are public record. When the tax court grants the pending motion

to dismiss or otherwise issues a decision or other order disposing of the case, that decision will be

available to any member of the public, including me, on the tax court website.

Very truly yours,

Stephen R. GianelliAttorney-at-Law (ret.)

Crete, Greece

From: Kelley Lynch < >Date: Mon, Sep 7, 2015 at 12:53 PMSubject:

To: "*IRS.Commisioner" <* >, Washington Field< >, ASKDOJ <ASXD_OJ@usdsojgov>, "Division, Criminal"< >, "Doug.Davis" <Doug.Davis@,ftb.ca.gov>, Dennis

< >, MollyHale <MollyHale@,ucia.gov>, nsapao <n_sap_an@_Ansagoy>,

fsb <fsb fsh u>, rbyucaipa <rbyuraip_a@yahos,_cenm>, khuvane <Mcaa.com>, blourd<l21nu_rd@ca_a c_om>, Robert MacMillan < >, a< >, wennermedia<x6>,Mick Brown

< co.uk>, "glenn.greenwald" < », Harriet

Ryan < >, "hailey.branson" < >, Stan Garnett

<stangarn ttt@ ma m>, Mike Feuer<h>,"mayor.garcetti"< », Opla-pd-los-occ <OPLA-PD-LOS-OCC@ice.dhs.gov>,

"Kelly.Sopko" <Iíelly _Snp_ko@tigta._t_reas.gov>, Whistleblower<hgp_âcnategov>, Attacheottawa <AttacheOttawa@ci.irs.gov>, t1_p_s radaronlingg>m

IRS,

I'm not convinced about the proxy ambulance chaser (Gianelli) and his argument re. ex partecommumcations. First of all, I can assure IRS that Gianelli does not have a power of attorney from

me to speak to IRS about any tax matter that involves me whatsoever. This man is a criminal. If I

wasn't afforded the opportunity to participate in any communication this criminal had with IRS

about my Petition, that would be a serious problem. This man appears to be an agent

provocateur/infiltrator. Isn't that why he hunted down Agent Sopko's partner or husband at DOJ?

I didn't ask the Court to decide my Petition based on Gianelli's self-proclaimed communications

with the gentleman handling the Tax Court Petition at the Chief Trial Counsel's office. I asked the

Court to investigate that matter. I think that will protect the communications. I also view this asblatant retaliation.

Kelley

From: Stephen R. Gianelli <stephengianelli@gmail.com>

Date: Sun, Sep 6, 2015 at 9:54 AMSubject: Your pending "Motion to supplement the record" purportedly filed in tax court andpublished on your blog and in mass emails

To: kelley.lynch.2010@gmail.com

Cc: BlindDistribution@gmail.com

By the way, Ms. Lynch, a prohibited "ex-parte communication" would be between a party or an

attorney and the court concerning a pending matter.

A communication directed on/v to an attorneyfor aparty by a person other than the court FOULD

NOT be an "exparte communication", nor would it be unethical or improper for any reason - IF such a

communication in fact occurred.

Attorneys contact each other about pending cases routinely.

Stephen R. GianelliAttorney-at-Law (ret.)

Crete, Greece

www.LinkedIn.com/in/stephencianelli/

From: Stephen R. Gianelli <stephengianelli@gmail.com>Date: Sun, Sep 6, 2015 at 3:14 AMSubject: "Motion to supplement the record" in your tax court case

To: kelley.lynch.2010@gmail.com

Ms. Lynch,

The tax court is not going to decide the pending motion to dismiss except on very narrow grounds

including did the IRS serve you with a Notice of Determination and if so whether or not you

initiated your tax court petition within 30-days of the date of mailing of that decision.

Your claims that various third parties, including me, are bad people or are "harassing" you are

completely irrelevant to the pending motion - just as those same claims were completely irrelevant

to your three state court motions that you lost notwithstanding your attempts to interpose those

irrelevancies in those Los Angeles Superior Court proceedings as well.

The court is concerned with the issues before it, not your general "poor persecuted me" arguments.

The tax court decides cases based on law, not sympathy.

Very truly yours,

Stephen R. GianelliAttorney-at-Law (ret.)

Crete, Greece

EXHIBIT B

Kelley Lynch419 N. Larchmont Blvd., Suite 91

Los Angeles, California 90004323.935.9939

July 25, 2004

Department of the TreasuryInternal Revenue ServiceOffice of Chief Trial CounselSmall Business/Self Employed Division Counsel3018 Federal Building300 N. Los Angeles StreetLos Angeles, California 90012

Re: Leonard Cohen vs. Commissioner (Docket No. 7024-02)

To Whom It May Concern:

I am writing with respect to the above referenced Trial Court case and related matters. I amLeonard Cohen's personal manager and have an ownership interest in three entities with him.Those entities are Blue Mist Touring Company, Inc., Traditional Holdings, LLC, and Old Ideas,LLC. These three entities either own or sold intellectual property.

For the year 1999, Sony Music issued a 1099 to Leonard Cohen in the sum of $1 million. OnJanuary 8, 2002, IRS issued Letter No. 3219 (SC/CG) to Leonard Cohen for the year endingDecember 31, 1999 showing a deficiency in connection with tax form 1040. This situation wasinitially handled by Leonard Cohen's personal tax and corporate attorney, Richard Westin, whothen referred Cohen to Hochman Rettig.

I became particularly concerned with respect to the conduct of Leonard Cohen and hisrepresentatives in January and February 2002. The reason for this is due to hysteria that arose inconnection with the "inadvertent" 1099s Sony issued to Leonard Cohen personally in theamounts of $1 million and $7 million respectively. Leonard Cohen's tax accountant wrote andadvised him that he shuddered to think of the penalties and interest due. Leonard Cohen calledhis tax accountant after receiving his letter to discuss the matter. This matter was then discussed,both telephonically and in emails, with Leonard Cohen, Richard Westin, and Neal Greenberg(Cohen's financial adviser and investor). These 1099s related to a deal that Sony pursued whichclosed in 2001.

What concerns me specifically is the fact that the Sony deal was done with Traditional Holdings,LLC and not Leonard Cohen. The $1 million non-refundable prepayment should have eitherbeen paid to Traditional Holdings, LLC or transferred to Traditional Holdings, LLC. Tocomplicate matters even further, the assets that were sold to Sony belong to Blue Mist TouringCompany, Inc. and were not assigned to Traditional Holdings, LLC. The reason for this is due tothe fact that, while Sony initially pursued this deal with Blue Mist Touring Company, Inc. (andbegan their due diligence with that entity), Cohen's accountant and tax lawyer raised issuesrelated to collapsible corporations. Richard Westin represents Leonard Cohen. He does notrepresent me or the entities themselves. I did provide Westin with a very limited power ofattorney authorizing him to prepare and file the Traditional Holdings, LLC formation documentswith the State of Kentucky. I also agreed, after Cohen instructed him to do so, to permit RichardWestin to prepare my Indemnity Agreement with respect to my investment in TraditionalHoldings, LLC via a promissory note. I do not understand how an individual invests in acompany via a promissory note and, at the same time, receives distributions with which to thepayments. I am enclosing Richard Westin's March 6, 2002 letter summarizing this matter. Ispecifically requested that he write this letter to avoid any future confusion between me andLeonard Cohen. According to the corporate records, I receive $20,000 and $24,000 which paysthe promissory note and taxes. I also receive $240,000 year (from profits) to pay whatever taxesWestin advises are due with respect to Traditional Holdings, LLC. Richard Westin handles theTraditional Holdings, LLC tax returns and prepares the K-1s. While I am to receive 100% of theprofit (and this was the agreed upon amount Cohen and Westin arrived at), I am unable to obtainfinancial statements and/or profit and loss statements from Neal Greenberg. And, while RichardWestin and Neal Greenberg are supposed to handle all loan documentation (Greenberg wouldhave those details), most of Leonard Cohen's loans (totaling millions) from TraditionalHoldings, LLC remain undocumented. I would also like to note that Neal Greenberg's financialstatements are incoherent and originally co-mingled Leonard Cohen's personal accounts; hischaritable remainder trusts; and the Traditional Holdings, LLC accounts on one statementprepared for Leonard Cohen personally. Greenberg also provides a courtesy monthly email thatincludes the loans which he and Westin have repeatedly confirmed are assets of TraditionalHoldings, LLC. I am alarmed by the complete lack of attention to corporate governance. I alsoenclose herewith Neal Greenberg's January and June 2004 letters to Leonard Cohen raising "IRSwarnings" and dangers. I've reviewed these letters with Leonard Cohen and he advised me notto inform Neal Greenberg of any future income. That would include the studio album that willbe delivered; his plans to tour behind that album; and the third intellectual property deal we arepursuing. That deal is also complicated because Leonard Cohen is once again demandingunattractive stock deals. Leonard Cohen continually advises me that he does not want to payordinary income taxes. I find these comments alarming in light of some of the other activity.

I have no expertise in IRS or tax matters and find a great deal of the discussions about taxmatters thoroughly confusing if not downright deranged. Some of the information I receive isincoherent. I do not handle IRS, tax, accounting, financial, investing, legal or inadvertent 1099matters. I also do not handle financial statements, financial reports, loan documents, orpromissory notes. Leonard Cohen has a team of professional representatives handling thosematters. I am enclosing an email dated February 12, 2002 between me, Leonard Cohen, andRichard Westin that is self-explanatory and addresses some of my concerns.

On January 17, 2003, Hochman Rettig wrote David R. Jojola of the Los Angeles Office of theChief Trial Counsel. This matter was handled by Steve Blang at Hochman Rettig. I hadconcerns about Traditional Holdings, LLC and the private annuity agreement. I am enclosingmany of the corporate records for these entities; the Annuity Agreement; and my IndemnityAgreement. I am also enclosing the stock certificates, non-revocable assignments, and otherdocumentation related to my ownership interest in Blue Mist Touring Company, Inc., TraditionalHoldings, LLC, and Old Ideas, LLC which was formed in June 2004 in Delaware (by RichardWestin) and owns the intellectual property associated with Cohen's forthcoming studio album.

After I addressed my concerns with Steve Blanq, I sent him some of the Traditional Holdings,LLC documents and the Annuity Agreement. I then mentioned to Richard Westin that I spoke toSteve Blang about these matters. I received a phone call from Steve Blang advising me that hespoke to Richard Westin who informed him that I do not have attorney/client privilege andtherefore Steve Blang may not discuss these matters with me. Given the fact that I have anownership interest in Traditional Holdings, LLC, I find that statement alarming. Leonard Cohenpersonally wrote Richard Westin and Neal Greenberg wrapping them in attorney/client privilegeand excluding me.

Hochman Rettig's letter addressed the factual and legal analysis of the Cohen v. Commisionermatter (Docket No. 7024-02) as follows: "Leonard Cohen, through his representatives, begannegotiations in 1999 with Sony Music International ("SMI") for a buyout of his SMI masterrecordings catalog. In an effort to secure that SMI was serious about the buyout and to securefuture performance, Mr. Cohen demanded a deposit of $1,000,000. Ultimately, SMI agreed tothis request and on November 5, 1999, wired Mr. Cohen $1,000,000. Accompanying the wiretransfer was a Ietter dated November 5, 1999 which is attached hereto as Exhibit A. The letterfrom Paul Gilbert of SMI provides: 'This amount is deemed a partial prepayment against theproposed $8 million buy-out of Leonard's future royalty interests in his master recordings andcompositions under all of his agreements with Sony Music and Sony/ATV.' The factual basisfor treatment as a deposit is further supported by Mr. Gilbert's letter dated April 1, 2002(attached hereto as Exhibit B) which provides: '. . . this letter is to confirm that the $ 1,000,000paid to you by Sony Music Entertainment, Inc. ("SMEI") in November of 1999 was a deposittowards a possible royalty buyout ...'"

This is not my understanding with respect to the $1 million prepayment. I would like to keepthis letter confidential because I am convinced that I would lose my job if Leonard Cohen, or hisrepresentatives, were to find out that I contacted IRS. There has been so much paranoia andhysteria on the part of Leonard Cohen and his representatives over this matter that I can concludenothing other than some type of egregious tax fraud has occurred.

The history of this deal, and specifically the $1 million non-refundable prepayment, actuallybegan when Leonard Cohen actively began pursuing intellectual property deals. He closed thefirst deal, with Stranger Music, Inc., in 1996. He then actively began pursuing other intellectualproperty which included a possible bond securitization deal. As of November 1999, LeonardCohen planned to close a bond securitization deal with CAK. In order to pursue that deal, Cohenformed LC Investments, LLC. CAK demanded a bankruptcy proof entity. However, SOCAN(the Canadian performing rights society) refused to pay writer share of royalties to a company

not owned 100% by the writer, Leonard Cohen. Therefore, it was decided and agreed (by Cohenand his representatives) that LC Investments, LLC would collect the SOCAN royalties. Theseassets are owned by Blue Mist Touring Company, Inc. which is true for all intellectual propertyexcluding the forthcoming the intellectual property related to the forthcoming studio album thatwill be delivered to Sony in the near future. I am enclosing Leonard Cohen's declaration in theCAK litigation that ensued and IRS can review the CAK litigation documents that were filed inthe Southern District of New York (Docket No. 1:00-cy-01068-CBM).

What concerns me about the letter Hochman Rettig wrote is this paragraph: The legal authorityis derived from the Supreme Court decision in Commissioner v. Indianapolis Power & Light Co.,493 U-S. 203, I 10 S. Ct. 589 (1990). The Court created a distinction between the taxation ofadvance payments and the taxation of refundable deposits, although the Court confirmed thatadvance payments are generally taxable and defined "advance payment" as a non-refundablepayment. The Court, however, held that deposits are not taxable. The Court defined "deposits"as refundable payments that are made to secure the payor's performance of its legal obligationsunder the contract. Please note that the Court also found that a deposit is not taxable even if thepayor elects to apply the deposit against amounts owed to the payee. Thus, if the payor fulfills itsobligations under the contract, the deposit is refunded. That is the exact scenario presented in thismatter. This analysis is also consistent with the United States Tax Court's longstandingtreatment of real estate lease deposits where the Court has distinguished between a sumdesignated as a prepayment of rent (taxable upon receipt) and a sum deposited to secure thetenant's performance of a lease agreement. J & E Enterprises, Inc, v. Commissioner."

The reason this paragraph concerns me is that Sony personally contacted me about pursuing the2001 intellectual property deal with Leonard Cohen. Stuart Bondell, Sony Music BusinessAffairs, explained to me that Sony did not want Leonard Cohen pursuing a bond securitizationdeal. Evidently they had concerns about establishing artist precedent for these types of deal andwere specifically concerned about not having the ability to pay artist record advances. As StuartBondell explained, advances are the currency of the music industry and permit Sony (and others)to encourage artists to submit their contractually obligated albums. I phoned Leonard Cohen andexplained that Sony wanted to pursue the intellectual property deal with him. Cohen wassomewhat worried that Sony was making an offer and could later change their minds. Therefore,he advised me that he would be willing to forfeit the CAK bond securitization deal if Sony paidhim a substantial non-refundable prepayment against the $8 million deal price. The contractualdetails had to be resolved and negotiated. I phoned Stuart Bondell back and passed alongCohen's message and Sony agreed to pay the $1 million non-refundable prepayment Cohenrequested. Therefore, from my perspective, Cohen received $1 million in income from Sony in1999. However, the assets were owned by Blue Mist Touring Company, Inc. at the time. As of2001, Richard Westin had formed Traditional Holdings, LLC who ultimately pursued the stockdeal Leonard Cohen personally demanded.

Your October 8, 2002 letter to Richard Westin requests all documents related to the $1 millionpayment including correspondence, contracts, agreements, royalty obligations, loan documents,emails, letters, and checks. While I am enclosing a substantial amount of evidence, IRS wouldliterally have to make arrangements to come into my management offices and go through thefiles. They are voluminous and include the corporate files and corporate books and records.

While I am not involved with this IRS and/or Tax Court matter at all, I do believe thatinformation is being concealed from the IRS and that makes me extremely uncomfortable.

It was my understanding that Richard Westin and Ken Cleveland, Cohen's accountant, decidedto handle the $1 million as a loan on Cohen's personal tax return. I was not involved in thatdiscussion but was on a conference call when they two of them confirmed this and asked me tocall Leonard Cohen to see if he agreed. I then phoned Leonard Cohen personally; he confirmedthat he wanted the $1 million handled as a loan; and I called Westin and Cleveland back andconfirmed this with them.

This essentially sums up my concerns about the $1 million prepayment; $7 million inadvertent1099s; and the fact that the assets are owned by Blue Mist Touring Company, Inc. Initially, afterthe non-revocable assignments were executed by Cohen and me, Richard Westin advised us tobegin depositing all royalty income to Blue Mist Touring Company, Inc. At a later date, headvised me (and some of this is in writing) that those deposits should be explained asinadvertent. This situation also causes me concern because the income was deposited to BlueMist Touring Company, Inc. and Westin determined that Leonard Cohen personally should issuethe 1099s. Richard Westin also advised me to rip up the SOCAN and writer share assignmentswith respect to Blue Mist Touring Company, Inc. I took copies home and enclose copiesherewith.

Another ongoing issue relates to where the offices for these entities are. There are no offices. Ihave continuously advised Richard Westin that my personal management offices are not thecorporate entities' offices. These entities use my P.O. Box for their corporate office addresses.Traditional Holdings, LLC's corporate office is listed as Richard Westin's home address inKentucky. Most of these entities are Delaware entities. I do not know why Leonard Cohen andhis representatives decided to form Traditional Holdings, LLC in Kentucky. I am enclosingletters Richard Westin prepared for Leonard Cohen and me with respect to the initial proposalswith respect to the use of an annuity. Leonard Cohen rejected the first proposal and did not wanthis adult children involved in any entity he has an ownership interest in.

Please see evidence enclosed.

Thank you for your attention to this matter and, if I uncover additional information, I will submitthat to Internal Revenue Service as well.

Very truly yours,

Signed

Kelley Lynch