- 54 -
Dennett made errors in his preparation of petitioners' returns
for the years at issue.
In order to provide additional support for their contention
that Mr. Dennett made errors in his preparation of their returns
for the years at issue, petitioners assert that Mr. Dennett
should have known that their income in each such return was
understated because he prepared (1) the unaudited projected
financial statements for Design Consultants for 1986, which
reflected projected gross receipts in an amount that is almost
twice as large as the gross receipts reported by petitioners in
their 1986 Schedule C, and (2) the unaudited projected financial
statements for White Star for 1988, which reflected projected
gross receipts in an amount that is almost four times as large as
those reported by White Star in its 1988 Form 1120S.17 Peti-
tioners further contend that the August 31, 1988 unaudited
personal financial statements reflected their assets on a "com-
plete and accurate basis" and that those assets could not have
been accumulated with the income that they reported in their
returns for the years at issue.
17 Although Mr. Olbres asked Mr. Dennett to prepare both per-
sonal and business unaudited financial statements throughout the
approximate 14-year period during which petitioners retained Mr.
Dennett, Mr. Olbres testified at trial that he did not know the
meaning of the term "unaudited". We are incredulous that Mr.
Olbres, who was in control of a multimillion dollar business and
who had many unaudited financial statements prepared for peti-
tioners and their business, did not know the meaning of that
term.
Page: Previous 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 NextLast modified: May 25, 2011