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Thereafter, petitioner met Sam Morris (Morris), a Las Vegas
accountant, at a conference in Los Angeles, California. In
response to questions by Morris, petitioner explained his
business and the types of expenses he incurred. Morris offered to
review petitioners' returns to see whether petitioner could take
advantage of certain deductions. Petitioner checked Morris'
references and found nothing unusual. Sometime in 1991,
petitioner sent a 30-pound box by Federal Express to Morris'
office in Las Vegas, Nevada. Petitioner kept no receipt or list
of the documents contained in the box, but he believes the box
contained all of his tax records for 1988 through 1991, including
credit card statements, bank statements, receipts, copies of
prior tax returns, and his daily log for those years. Morris
prepared, and petitioners signed and filed, a Form 1040X (the
amended return) for taxable year 1989. When Morris presented
petitioner with the amended return, petitioner did not review it
in depth prior to signing and filing it. Respondent received the
amended return on April 3, 1992. On the Schedule C for the
computer consulting activity attached to the amended return,
petitioner reported gross receipts in the amount of $75,312 and
claimed the following expenses:
Expense Amount claimed
Car and truck $3,390
Depreciation 3,591
Insurance 1,412
Other interest 3,277
Legal/professional 1,301
Rent/lease machinery and
equipment 50
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