- 5 - the years under consideration had been destroyed because he had given them to his children to color on. He also expressed his belief that records more than 3 years old should be destroyed. Because of the possible criminal violations, petitioners retained a lawyer. Their lawyer had possession of the brown books for the years under consideration. The brown books were ultimately turned over to respondent's special agent who provided them to Ms. Bellamy. Tax Return Preparation Petitioner prepared petitioners' tax returns for the years under consideration. Mrs. Jenkins did not participate in the completion of the returns. Petitioners paid no income tax for 1982, 1983, 1985, and 1986; they paid $240 in income tax for 1984. Ms. Bellamy primarily used the bank deposit analysis (and then made modifications as additional information was provided) to identify petitioners' unreported Schedule C income for 1984, 1985, and 1986. Petitioner did not report all of his gross receipts from his Field Masonry business. When the audit began, petitioner wrote a $25,000 personal check, payable to the Internal Revenue Service, and gave it to Ms. Bellamy because he was certain that petitioners had underreported their income and owed at least that amount. a. 1984 Joint Federal Income Tax Return Petitioners claimed, among others, the following expenses as Schedule C deductions on their 1984 return:Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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