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Gelda's method for preparing the Jacobys' income tax
returns did not vary. Gerald would meet with Gelda, and they
would assemble the information necessary to prepare the Forms
1040. Petitioner would assemble charitable contribution receipts
and mortgage payment statements and give them to Gerald. This
was petitioner's only participation in the preparation of the
Forms 1040. After preparing the returns, Gelda would sign them
as preparer and then forward the return to Gerald to sign and
file.
Petitioner knew that Gelda had a longstanding professional
relationship with Gerald and his family, and she believed that
Gelda was a cautious return preparer. Petitioner had known Gelda
personally since she married Gerald, and she trusted Gelda
entirely. Petitioner considered Gelda an expert in tax matters
and had no reason to question his judgment.
For the taxable years 1978, 1979, and 1980, the Jacobys
filed Forms 1040, and each Form 1040 indicated a filing status of
"married filing joint return".
Gelda prepared the 1978 Form 1040, signed it, and forwarded
it to Gerald to sign and file. Gerald signed petitioner's name
on the 1978 Form 1040, and petitioner never reviewed it.
Petitioner did not know that Gerald had placed her signature on
the 1978 Form 1040, and Gerald never discussed with petitioner
his having signed her name.
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