David Bruce McMahan - Page 7

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                  Mr. Russell was responsible for preparing and filing                                
            petitioner's 1982 income tax return.  In May or June of 1983,                             
            MBMC decided to transfer the responsibility from Mr. Russell to                           
            OAD.  Documents relating to the preparation of the return,                                
            however, were not transferred from him to OAD until after the                             
            August 15, 1983, deadline.  There is no evidence that anyone                              
            other than Mr. Russell had responsibility for the return before                           
            that responsibility was assumed by OAD.  Petitioner continued to                          
            ask Mr. Russell about the status of the return through mid-                               
            August, and Mr. Russell continued to assure petitioner and Ms.                            
            Supino that the extension request would be filed on time.  Thus,                          
            we find that Mr. Russell had the responsibility through August                            
            15, 1983, to file petitioner's return (or extension request).                             
                  Mr. Russell testified that he was not responsible for filing                        
            petitioner's return.  His testimony was not credible.  When he                            
            was questioned about the second extension request, he could not                           
            recall various details, including whether he had:  (1) Been asked                         
            by petitioner to file a second extension request; (2) discussed a                         
            second extension request with petitioner; (3) prepared a second                           
            extension request; or (4) represented to petitioner that a second                         
            extension request had been filed.  Thus, we attach little weight                          
            to his testimony regarding the extension requests and find that                           
            petitioner relied on Mr. Russell.                                                         
                  Respondent notes that, in May or June, MBMC decided to                              
            transfer responsibility for the return to OAD and argues that                             




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