Eric A. and Jane C. Lanigan - Page 3

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                  In the years 1990 and 1991, petitioner was a financial                                  
            planner.  He received compensation from multiple sources such as                              
            insurance and investment companies.  Petitioner also paid                                     
            commissions to other individuals for which he was entitled to                                 
            business expense deductions.  In 1990, petitioner received                                    
            compensation from at least six sources.  In 1991, he received                                 
            compensation from 15 sources.  Some of petitioner's compensation                              
            was reported on Forms W-2 and some on Forms 1099.  In each year,                              
            petitioner received more than one income statement from at least                              
            one company.2                                                                                 
                  Petitioners filed for, and were allowed, an extension of                                
            time to file their Federal income tax return for taxable year                                 
            1990, extending the due date to October 15, 1991.  Their 1991                                 
            return was due on April 15, 1992.  Both returns were filed on                                 
            October 19, 1992.                                                                             
                  Sometime prior to October 19, 1992, petitioners received a                              
            letter from the Internal Revenue Service (IRS) requesting                                     
            petitioners to bring in their records at a specified time for                                 
            purposes of preparing a return.  Just prior to the scheduled                                  
            meeting, petitioner filled out portions of the returns (Forms                                 

            2 In 1990, petitioner received two Forms 1099 from Security                                   
            Life of Denver, and both a Form 1099 and a Form W-2 from New                                  
            England Mutual Life Insurance Co.  The Form 1099 from Gordon                                  
            Anthony for 1990 is marked "corrected", indicating a previous                                 
            incorrect form had been issued.  In 1991, petitioner received                                 
            both a Form 1099 and a Form W-2 from New England Mutual Life                                  
            Insurance Co. and two Forms W-2 from Provident Mutual Life                                    
            Insurance Co.                                                                                 




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