- 34 -
and that she would be reporting the interest income from those
notes. Davidson met with Mr. Gandy to review the completed
return. Thereafter, Davidson learned that the Gandys' divorce
had occurred during 1988 and, in late 1988, he sent to Mr. Gandy
a letter indicating that the 1988 tax return should be amended to
include the interest earned on the mortgage notes while they were
community property. An amended 1988 tax return was not filed for
Mr. Gandy.
Mr. Gandy's 1989 tax return was prepared by Gary W. Camp
(Camp), a certified public accountant. Camp prepared the 1989
tax return from information supplied to him by Mr. Gandy: a
balance sheet, profit and loss statement, fuel costs, and a list
of equipment that was purchased and traded. This information
provided by Mr. Gandy was used by Camp to compute the gross
receipts of the nursery for 1989. Camp did not have any bank
statements or ledgers.
Summary
The following table summarizes pertinent items from the tax
returns for the years in issue:
Page: Previous 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 NextLast modified: May 25, 2011