Dwight L. McKenna and Beverly S. McKenna - Page 14

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            compilations because the account contained too much personal type                           
            information, including other income from investments.                                       
                  In New Orleans, where petitioner practices medicine, an                               
            occupational license tax was due to the city.  This occupational                            
            license tax was computed based upon a certain percentage of the                             
            gross income of the business.  Bruno and Tervalon did not prepare                           
            petitioner's 1987 and 1988 occupational license tax forms.                                  
                  Petitioner told Mr. Bruno that he deposited all of his                                
            income into his First Federal checking account.  He further                                 
            stated that he maintained a total of his income throughout the                              
            year.  When he brought his tax information to Mr. Bruno,                                    
            petitioner gave him a total gross income figure for the year.                               
                  Petitioner did not tell Mr. Bruno that he was cashing some                            
            of his income checks at Circle Food Store, and that he did not                              
            deposit such funds into his checking account.                                               
                  Petitioner did not tell Mr. Bruno that he was cashing some                            
            income checks at Liberty Bank, and that he did not deposit such                             
            funds into his checking account.                                                            
                  Petitioner did not tell Mr. Bruno that he took income checks                          
            to First Federal and that he exchanged those checks for bank                                
            checks drawn on First Federal's suspense account.                                           
            Preparation of Petitioners' 1987 and 1988 Income Tax Returns                                
                  In preparing the Schedule C for the newspaper business for                            
            1987 and 1988, Mr. Bruno's firm relied upon the information on                              






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