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Petitioner refused to sign that document and disputes its
accuracy. However, petitioner did receive from Ms. Michell a
check for $131,537.05 sometime during 1993. Petitioner began to
pursue legal remedies against Ms. Michell in the California
courts for legal malpractice. Part of those measures are still
pending. Suffice it to say that, at the time of trial before
this Court, it has been held that Ms. Michell had breached her
contract with petitioner and had claimed excessive fees.
Beginning in 1993, several family members and friends came
to petitioner to have their 1992 Federal income tax returns
prepared by him because they knew petitioner had a strong
background in business administration and taxation. Petitioner
credibly testified that he prepared no more than 10 tax returns
in 1993. Petitioner stated that he may have charged as much as
$200 per return, but he is not sure whether he collected from
everyone the money owed to him. In 1994, petitioner prepared
between 10 and 15 returns, including one for a friend whom he
charged $450.
Discussion
The Commissioner’s determination in the notice of deficiency
is presumed correct, and petitioner bears the burden of proving
otherwise. Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933).
Where a taxpayer has not filed a tax return, respondent may
reconstruct a taxpayer’s unreported income. Holland v. United
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Last modified: May 25, 2011