Dwight L. McKenna and Beverly S. McKenna - Page 21

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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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