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Consultants reported by petitioners in Schedule C, Profit or
(Loss) from Business or Profession (Schedule C), of their 1986
return (1986 Schedule C) and the unaudited projected financial
statements for White Star for 1988 reflected projected gross
receipts in an amount that is almost four times as large as the
gross receipts reported by White Star in its 1988 Form 1120S,
U.S. Income Tax Return for an S Corporation (1988 Form 1120S).
The draft, unaudited statements of income and expenditures
for Design Consultants for 1986 and 1987 reflected gross receipts
and net income in amounts that are identical to the respective
amounts of gross receipts and net income reported in petitioners'
1986 Schedule C and Schedule C of petitioners' 1987 return.
The August 31, 1988 unaudited personal financial statements
contained the following caveats:
We have compiled the accompanying statement of finan-
cial condition of Anthony G. and Shirley A. Olbres as
of August 31, 1988, in accordance with standards estab-
lished by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting in the form of
financial statements information that is the represen-
tation of the individuals whose financial statements
are presented. We have not audited or reviewed the
accompanying statement of financial condition and,
accordingly, do not express an opinion or other form of
assurance on it.
The August 31, 1988 unaudited personal financial statements did
not include information with respect to petitioners' checking
accounts at Indian Head or their bank accounts at Kennebunk. Nor
did those statements include information with respect to peti-
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