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Petitioner’s returns for the taxable years 1989, 1990, and
1991 were prepared by Fred Pressley.3 Mr. Pressley prepared
petitioner’s returns based upon documentation supplied to him by
petitioner. The records maintained by petitioner included the
Forms 1099 referred to above, rental income and expense records,
and records pertaining to the operations of his consulting
company. Petitioner provided Mr. Pressley with documentation for
expense items in amounts as small as $3.26. Petitioner also
provided Mr. Pressley with Partner's Share of Income, Credits,
Deductions, Etc. (Schedule K-1's) from Aquamar and Skyview
Development.
During the preparation of petitioner’s 1989 tax return,
petitioner informed Mr. Pressley that he had received income from
Mr. Hall, but had not received a Form 1099 from Mr. Hall.
Petitioner did not give Mr. Pressley information regarding the
amount of income he had received from Mr. Hall. Mr. Pressley
initially advised petitioner to obtain a Form 1099 from Mr. Hall;
however, petitioner informed Mr. Pressley that he would not be
able to obtain the Form 1099 by the due date of the return. Mr.
Pressley then advised petitioner that it would be appropriate to
estimate the amount of the income, report that estimate on the
3Mr. Pressley’s work experience is primarily in hotel
management and the laundry and dry cleaning services. In 1978,
Mr. Pressley was employed by H & R Block as a seasonal tax return
preparer. Mr. Pressley operated his own tax service from 1980
until 1987. He continued to prepare income tax returns on a
part-time basis until 1993.
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