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[Petitioners contend] that * * * [they], being
unversed in matters of accounting, relied totally upon
* * * [Reed] to insure the accuracy of * * * [their]
records and prepare * * * [their] tax returns. * * *
[Petitioners] further contend that the resultant
understatements are not such as would cause * * *
[petitioners] to be aware that * * * [their] income was
underreported. We cannot agree with either contention.
At the outset we are not impressed with * * *
[petitioners'] attempt to characterize * * *
[themselves] as * * * unknowledgeable * * *
[businesspeople]. * * * the record shows that * * *
[the Rooses had their] fingers on the pulse of the
financial affairs of * * * [Roose Drug Store].
* * * [Petitioners'] conduct was intimately
entwined with the inaccurate recording of * * * [their]
business income. * * *
While a taxpayer's reliance upon his accountant to
prepare accurate returns may indicate an absence of
fraudulent intent, John Marinzulich [v. Commissioner],
31 T.C. 487, 490 (1958), this is true in the first
instance only if the accountant has been supplied with
all the information necessary to prepare the returns.
Petitioner[s] [argue] in this regard that * * * [Reed]
had total access to all of * * * [petitioners'] books
and records, so that even though the * * * [Drug Topics
book] was inaccurate, a thorough professional job of
accounting would have uncovered the inaccuracies. Of
course the thorough audit by respondent's agents did
discover many omitted and erroneous entries. However,
we cannot conclude on the basis of the record before us
that * * * [Reed] was retained to check with * * *
[petitioners'] customers in order to find out whether
they made payments to * * * [petitioners] which were
not recorded in the * * * [Drug Topics book] or to
otherwise doublecheck the * * * [Drug Topics book]
entries made by * * * [Mrs. Roose]. The evidence
points to the contrary. * * * [Id. at 162-163; fn.
ref. omitted.]
Considering the entire record, we conclude that respondent
has proven by clear and convincing evidence that the entire
amount of the underpayments of tax on petitioners' returns for
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