Bill McDonald - Page 3

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          1994-607, and Shackelford v. Commissioner, T.C. Memo. 1995-484,             
          respectively.3  Respondent and petitioners agreed to be bound by            
          the outcome of the above-referenced opinions.  The above-                   
          referenced opinions hold that the taxpayers were married for                
          Federal income tax purposes, although they had subsequently                 
          obtained annulments of their marriages under the laws of the                
          State of California.  Accordingly, petitioners’ filing status               
          should have been “married filing separately” for purposes of                
          their 1989 tax year.                                                        
               Petitioners, at all pertinent times, were certified public             
          accountants, with more than 60 years of experience between them,            
          practicing together in an accounting partnership known as Maynard           
          & McDonald (M&M).  There was no written partnership agreement               
          through the 1989 tax year.  McDonald is also an attorney licensed           
          to practice in the State of Oklahoma.  M&M is a cash basis                  
          partnership that petitioners formed in 1976 and operated during             
          the 1989 taxable year in Sacramento, California.  M&M’s principal           
          activities are tax return preparation, assistance to clients in             
          tax-related matters, providing accounting services, and                     
          representing clients before various administrative levels of the            
          Internal Revenue Service.  In addition, McDonald also filed                 
          clients’ petitions with this Court.  McDonald was familiar with             

               3 Petitioners were either the parties in the underlying                
          cases or referenced in several recent opinions issued by this               
          Court.  See Bill McDonald, et al. v. Commissioner, T.C. Memo.               
          1994-607; Denver W.  McDonald v. Commissioner, T.C. Memo. 1995-             
          359; Betty J. Shackelford v. Commissioner, T.C. Memo. 1995-484;             
          and Mary C. McDonald v. Commissioner, T.C. Memo. 1995-503.                  


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