- 12 -
Preparation of Petitioner’s Tax Returns
Mr. Reiter’s office prepared petitioner’s tax returns for
the years in issue. This included preparing the Schedule C
related to the law firm. Mr. Reiter did not reconcile any
personal accounts of petitioner or Mr. Ludlow in order to prepare
these returns. Other than yearend statements showing the total
interest or dividend income earned during the year, Mr. Reiter
and his staff received no records regarding petitioner’s Merrill
Lynch accounts or any other personal accounts.
Unaware of the income petitioner diverted to her Merrill
Lynch account, Mr. Reiter and his staff did not include it in any
of the monthly financial statements, the annual income
statements, or the income tax returns that Mr. Reiter’s office
prepared for petitioner and the law firm.
Audit of Petitioner
In November or December 1991, Revenue Agent Francisco
Rangel began a civil audit of petitioner and Mr. Ludlow’s 1988
return. On December 11, 1991, Mr. Rangel conducted his initial
interview at the law firm. Pursuant to a power of attorney, Mr.
Reiter represented petitioner and Mr. Ludlow at the meeting. Mr.
Ludlow attended the meeting, but petitioner did not.
Mr. Rangel asked about the law firm’s business bank
accounts, and he was informed that the law firm had two accounts:
The general operating account and the client trust account.
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011