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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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