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attention any expenses or receipts that were omitted from those
statements.
Petitioners' 1985 through 1987 Federal income tax returns
were filed reporting a status of married filing jointly. The tax
returns for 1985 through 1987 were prepared by Shinn. Shinn
prepared petitioners' 1985 through 1987 tax returns from
information supplied to him by petitioners, bank statements,
deposit tickets, canceled checks, and check stubs from the
nursery bank account. Petitioners did not provide Shinn with the
ledgers or inform him of their existence. Petitioners never told
Shinn about the checks payable to the nursery that were cashed or
about those deposited into accounts other than the nursery bank
account. Mrs. Gandy never gave personal checking account
information to Shinn. It was Shinn's understanding that
petitioners used the nursery bank account for their personal
expenses and that they did not have a personal checking account.
Shinn followed the method that had been used by the preparer
of petitioners' 1984 tax return. The records from the nursery
bank account were used by Shinn to compute the gross receipts of
the nursery. Mr. Gandy represented to Shinn that the deposits
that were identified as being from Burnice Gandy were loans.
Shinn did not include any cash income or expenses when preparing
Schedule F.
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