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Mr. Bruno advised Ms. Davis that similar full accounting
services were not performed by his firm for petitioner's medical
practice. To determine income, he stated that petitioner kept
such information and that he relied upon the total dollar figures
furnished to him by petitioner. Based upon such representations
to him, Mr. Bruno advised Ms. Davis that he thought all of the
income was deposited into petitioner's bank account. To
determine expenses for the medical practice, unlike his method
for giving an income figure to Mr. Bruno, petitioner gave Mr.
Bruno envelopes that contained canceled checks and expense
receipts.
Because Mr. Bruno had a limited knowledge of petitioner's
medical practice income, and additional information was needed,
Ms. Davis requested that Mr. Bruno schedule an appointment with
petitioner so that information could be obtained about the
medical practice and how petitioner determined the income figures
on his Schedule C.
At Ms. Davis' first meeting with Mr. Bruno, she submitted to
him a second IDR dated October 27, 1989, which requested: "All
other statements for all bank accounts. This includes checking,
savings, and investment accounts". Mr. Bruno sent a copy of this
IDR to petitioner and told him the requested documents had to be
produced.
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