Thomas B. Drummond - Page 14

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               Petitioner’s Books and Records                                         
               Relating to His Horse Activity                                         
               and His Cattle Activity                                                
              During the years at issue, petitioner did not maintain a               
          separate bank account for either his horse activity or his cattle           
          activity.  During those years, petitioner retained invoices,                
          receipts, and canceled checks relating to the expenses that were            
          incurred in those activities.7  However, he did not maintain                
          books or records such as ledgers and registers to memorialize the           
          various transactions relating to those activities or to maintain            
          a historical record of those activities (e.g., the dates on which           
          horses were purchased, foals and calves were born, and calves               
          were sold; the specific nature of any training that the horses              
          that he owned received; and the specific periods during which any           
          such training was provided).                                                
          Petitioner's Tax Returns                                                    
               For the years 1988 through 1991, petitioner, who has a                 
          limited knowledge of the Federal income tax laws and who has not            
          had any formal training in accounting or tax matters, retained              
          the services of Mr. McVeigh, a tax return preparer since about              
          1982, to prepare his individual Federal income tax returns                  
               Petitioner relied on Mr. McVeigh to prepare requests to                
          extend the time within which to file his returns for 1989 and               

          7  Those invoices, receipts, and canceled checks are not part of            
          the record in this case.                                                    

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