Door Control Services, Inc., et al. - Page 4

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          letters expressed the terms under which Mr. Crim would prepare              
          the returns.  Every engagement letter specified that Mr. Crim               
          would prepare the tax returns based solely on the information               
          provided by the Gilchrists and would not audit the Gilchrists'              
          records to ascertain the accuracy of the information provided.              
               The Gilchrists routinely executed the engagement letters and           
          returned them to Mr. Crim.  After receiving the letter, Mr. Crim            
          would begin to gather information to prepare the return.  Each              
          year, he asked petitioners to provide relevant documentation,               
          such as deposit slips and bank account records.  In addition, at            
          the end of each year he sent the Gilchrists a questionnaire that            
          solicited additional information necessary to prepare their                 
          individual return.                                                          
               In preparing the individual returns, Mr. Crim relied on                
          Forms 1099, bank statements, and answers provided in the                    
          questionnaire.  In preparing the corporate returns, Mr. Crim                
          determined Door Control's gross income and deductions by                    
          examining Mrs. Gilchrist's handwritten explanations on deposit              
          slips and check stubs.  For each year, Mr. Crim would total Door            
          Control's deposit slips, subtract receipts that appeared (based             
          on Mrs. Gilchrist's handwritten notes) to be nontaxable, and                
          report the remainder as Door Control's gross income.  He would              
          also total check stubs that appeared (based on Mrs. Gilchrist's             
          handwritten notes) to be deductible and report the resulting                
          amounts as deductions on the return.  The Gilchrists generally              




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