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Dr. Rao's Accountant
Petitioners authorized their accountant, Victor Raclaw, to
act as their representative before the Internal Revenue Service
(the IRS). Dr. Rao was referred to Mr. Raclaw through a dentist,
Dr. Sudhakar Shetty, who rented space from Dr. Rao at the medical
center. Mr. Raclaw started doing tax-related work for Dr. Rao in
either 1982 or 1983. Mr. Raclaw prepared Federal income tax
returns on behalf of petitioners for the tax years 1986, 1987,
and 1988. Mr. Raclaw earned 120 credits towards a bachelor's
degree from Brooklyn College and City College. He does not have
a college degree, nor is he a certified public accountant.
To prepare the tax returns, Dr. Rao provided Mr. Raclaw with
Forms 1099, Forms W-2, bank statements, deposit slips, and
canceled checks. To determine Schedule C income, Mr. Raclaw
asked Dr. Rao if he had received income from sources other than
Form 1099 payers, and Dr. Rao responded that he received most of
his income from insurance providers and Forms 1099. Mr. Raclaw
also asked Dr. Rao if he received cash from private patients.
Dr. Rao said most of his income was from insurance carriers, and
"there was very little cash". Some of the expenses on
petitioners' Schedules E were averages, not specific
expenditures.
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