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Symbol Technologies co-founder sues Feds over tax deductions

In a lawsuit filed Tuesday, Oct. 10, 2017,

In a lawsuit filed Tuesday, Oct. 10, 2017, Jerome Swartz said he suffered losses in 2010 from two partnership investments totaling $4.5 million. Credit: Newsday / J. Michael Dombroski

Jerome Swartz, the 77-year-old bar code innovator who co-founded Symbol Technologies Inc., is suing the federal government for about $300,000 after tax deductions he claimed — including one stemming from a $2 million investment in the movie “Love Ranch” — were disallowed by the IRS.

In the lawsuit filed Tuesday in U.S. District Court, Eastern District, Swartz, of Lloyd Harbor, said he suffered losses in 2010 from two partnership investments totaling $4.5 million, which resulted in net operating losses of $3.9 million.

An equity investment in “Love Ranch” in 2008 resulted in a reported loss of $479,813 on Swartz’s 2010 tax return, according to the lawsuit.

The IMDb movie database lists “Love Ranch” as a 2010 drama about a “married couple who opened the first legal brothel in Nevada.” The film, starring Helen Mirren and Joe Pesci, had an estimated budget of $25 million and made $60,353 on its opening weekend in the United States, according to IMDb.

The lawsuit said the IRS notified Swartz that it disallowed his claim for a refund on the grounds that he was “unable to verify the losses” from 2010.

Swartz then filed a formal protest of the denial in November 2015.

The lawsuit, seeking $292,324 plus interest, was filed by the Melville-based law firm Tenenbaum Law.

Federal privacy laws prohibit the IRS from commenting about any taxpayer or case, an agency official said Wednesday. Swartz and Tenenbaum Law did not respond to requests for comment.

In 2003, Swartz stepped down as chairman and chief scientist of Holtsville-based Symbol amid investigations of the company’s accounting practices.

Tomo Razmilovic, who had earlier succeeded Swartz as Symbol’s chief executive, fled to Sweden in 2004. He is wanted on a criminal indictment and faces about $90 million in civil charges and fines in a case filed by the Securities and Exchange Commission.

Holtsville-based Symbol was acquired by Motorola in 2007, becoming part of Motorola Solutions in a corporate reorganization. Motorola Solutions’ enterprise business, including Symbol, was acquired by Zebra Technologies in 2014.

Swartz now leads the Swartz Foundation, whose stated goal is to “explore the application of physics, mathematics and computer engineering principles to neuroscience.”

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