3
Petitioners own and operate Stone's Appliance Repair, an
appliance repair business in Belgrade. Mr. Stone does the
repairs. Mrs. Stone is the office manager and bookkeeper. She
kept the books and performed other office duties from
petitioners' home until late 1994, when petitioners hired a
secretary.
B. Montana's Audit of Petitioners
Petitioners were clients of James Otis & Co. (Otis), a tax
consulting firm based in San Mateo, California. Otis retained
Cody & Co. to prepare some of its clients' tax returns, including
petitioners' returns. Cody & Co. prepared petitioners' 1994
Federal and State returns. The Internal Revenue Service (IRS)
and the Montana Department of Revenue (Department of Revenue) had
audited returns prepared by Cody & Co. A joint IRS/Department of
Revenue project identified Federal and State income tax returns
that had been prepared by Cody & Co. for possible audit. As a
result of the joint project, in 1994, the Department of Revenue
audited the deductions petitioners claimed on the schedule C
attached to their State income tax return. The Department of
Revenue gave petitioners' audit results to respondent pursuant to
the Implementation Agreement on Coordination of Tax
Administration Between the Montana Department of Revenue and the
IRS (Implementation Agreement).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011