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returns for the years at issue. Indeed, petitioners did not even
provide to Mr. Dennett's office complete written materials from
which that office could have reconstructed an accurate return for
1987 after the IRS began its examination of that taxable year of
petitioners. In this connection, to assist Mr. Dennett and Ms.
Wildes in their reconstruction of petitioners' 1987 return,
petitioners gave Mr. Dennett certain written materials relating
to 1987 that he did not have previously, including the cash
receipts journal for that year, which petitioners admit did not
reflect all of Design Consultants' receipts for that year.
Petitioners do not dispute that Mr. Dennett and Ms. Wildes
accurately reconstructed petitioners' 1987 return based on the
written materials that they provided to Mr. Dennett's office.
However, the amount of gross receipts reflected in Schedule C of
petitioners' reconstructed 1987 return was virtually identical to
(1) the amount of gross receipts reflected in the cash receipts
journal for 1987 and (2) the amount of gross receipts reflected
in Schedule C of the return that petitioners filed for that year,
both of which substantially understated Design Consultants'
receipts for 1987.
Even assuming arguendo that, in connection with Mr.
Dennett's preparation of their returns for the years at issue,
petitioners had provided him with the cash receipts journals and
the invoice logs, which are the only records that would have
shown the receipts of Design Consultants and/or White Star,
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