Dwight L. McKenna and Beverly S. McKenna - Page 15

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            the yearend financial statement or the trial balance.  This had                             
            been prepared as a part of its full accounting services and was                             
            based upon information furnished by Mrs. McKenna.                                           
                  For the remaining items on petitioners' Federal income tax                            
            returns, petitioner always brought the information necessary for                            
            the preparation of the returns to Mr. Bruno.  This would include                            
            the information relating to his medical practice, all Forms W-2                             
            and 1099, all information regarding rental property, and all                                
            other information relating to personal items.                                               
                  For petitioners' 1987 and 1988 returns, Marie Walters took                            
            the information given by petitioner to Mr. Bruno, compiled that                             
            information, prepared the tax returns, and returned them to Mr.                             
            Bruno for review.                                                                           
                  For the taxable years 1987 and 1988, Mr. Bruno had                                    
            discussions with petitioner advising him that petitioners' total                            
            income had to be reported on their tax returns and that there                               
            should be an attempt to reconcile the income going into                                     
            petitioner's bank account with the income being reported.                                   
            Petitioner was told that income taxable to him would include                                
            checks and cash that he received from his medical practice for                              
            the payment of services.                                                                    
                  For the preparation of the income tax return for 1987,                                
            petitioner gave Mr. Bruno a sheet on which he had written the                               
            words "Income Statement".  He orally told Mr. Bruno that his                                






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