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information from which to prepare the returns. See Morris v.
Commissioner, T.C. Memo. 1992-635, affd. without published
opinion 15 F.3d 1079 (5th Cir. 1994); Merlo v. Commissioner, T.C.
Memo. 1987-570. In this case, petitioners' alleged reliance on
Reed does not excuse them from the fraud addition to tax.
Petitioners hired Reed to prepare their personal income tax
returns and the store's employment tax returns. Petitioners did
not intend for Reed to determine their gross receipts or their
expenses or to audit the store's books, as indicated by the
amount that petitioners paid Reed and Mr. Roose's testimony at
trial. Although petitioners contend that they did not have time
to review their returns before they were filed, Mr. Roose's
testimony at trial suggested that this pattern did not change
even after he was indicted for tax fraud. No evidence has been
presented to indicate that petitioners' returns did not
accurately reflect the information petitioners provided to Reed.
Because of petitioners' intentional failure to report credit card
sales receipts, coupon redemption receipts, and certain special
deposits and due to no fault of his own, Reed was without the
information necessary to reflect accurately petitioners' income
on their tax returns for the years in issue.
This case is comparable to Estate of Temple v. Commissioner,
67 T.C. 143 (1976). We incorporate the same analysis here. The
Court's statements in Estate of Temple, may be adapted to this
case as follows:
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