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Richard Breslin (Mr. Breslin), a C.P.A., was the accountant
for Miller-Senate. Mr. Breslin and Mr. Welker regularly went to
lunch each month after Mr. Breslin reviewed Miller-Senate's
records. At these lunches, Mr. Welker occasionally asked Mr.
Breslin questions about tax return preparation. Mr. Breslin
remembered questions regarding how to handle a dividend
exclusion, report a gain on the sale of stock, and report income
that was not evidenced by a Form 1099. Mr. Breslin did not
remember having any conversations with Mr. Welker regarding the
tax treatment of gifts.
Brockland Pontiac did not issue any Forms 1099 to Mr. Welker
for the cash payments; however, Mr. Welker was aware that he had
to report all his income on his tax return regardless of whether
he received a Form 1099. Mr. Welker did not report the cash
payments as income for the years in issue.
On March 29, 1989, Special Agent Debra K. Alexander (Ms.
Alexander) and Revenue Agent Timothy E. Neighbors (Mr. Neighbors)
interviewed Mr. Welker at his home. Ms. Alexander read Mr.
Welker his rights and informed him that he was under criminal
investigation for unreported income he received from Brockland
Pontiac. Mr. Welker stated that, for the years in issue, he
reported all of his income on his tax returns. Mr. Welker also
told Ms. Alexander and Mr. Neighbors that he did not receive any
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