Kevin L. and Victoria L. Hargrove, et al. - Page 5

                                         -5-                                          
          to attach copies of the closing agreements to their respective              
          returns.  No petitioner attached a copy of his or her closing               
          agreement to the return for any of the relevant years.                      
               Mr. and Mrs. Hargrove did not retain the services of a                 
          preparer to assist them in filing their returns for 2000 and                
          2001.  Mr. and Mrs. Hargrove did not seek advice from any                   
          accountant, attorney, or other tax professional with respect to             
          their exclusions of income under sections 912 and 119.  Mr. and             
          Mrs. Hargrove reported they owed tax of $4,719 for 2000 and                 
          $4,123 for 2001.5                                                           
               Mr. and Mrs. Breeding filed their original returns for 1998            
          and 1999 without the assistance of a preparer.  They then                   
          retained Bob Ross, a certified public accountant located in                 
          California, on the advice of coworkers at the defense facility.             
          Mr. Ross filed amended returns for 1998 and 1999 on behalf of Mr.           
          and Mrs. Breeding excluding income under sections 119 and 912.              
          Mr. and Mrs. Breeding’s original returns for 2000 and 2001,                 
          prepared with the assistance of Mr. Ross, also excluded income              
          under sections 119 and 912.  Mr. and Mrs. Breeding reported they            
          owed tax of $22,235 for 2000 and $23,169 for 2001.6                         
               Respondent disallowed certain deductions and determined that           
          petitioners are not entitled to certain exclusions they claimed             

               5This is the sum stated in the deficiency notice.  We note             
          that the parties stipulated that Mr. and Mrs. Hargrove reported             
          amounts slightly different.                                                 
               6This is the sum stated in the deficiency notice.  We note             
          that the parties stipulated that Mr. and Mrs. Breeding reported             
          amounts slightly different.                                                 




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