- 20 -
Commissioner, supra at 308; McGee v. Commissioner, 61 T.C. 249,
260 (1973), affd. 519 F.2d 1121 (5th Cir. 1975).
Petitioner acknowledges that he was irresponsible and
negligent in the manner in which he handled his business affairs
and by his failure to review his returns for the years in issue,
but he contends that he did not intend to evade taxes known to be
owing. Petitioner contends that the understatement of income for
1990 was caused by a combination of the increase in the volume of
procedures petitioner performed at the Highline Community
Hospital,4 the inadequate system previously set in place and used
by his accountant, and erroneous assumptions made by the
accountant regarding deductions for alimony, payment of rent, and
payments to Ms. Stanbery. The understatement of income for 1991
was caused by the accountant's improper use of income reported
for the Washington State excise tax, which the accountant had
estimated using petitioner's 1990 income and adjusted on the
assumption petitioner stopped practicing medicine at the end of
July 1991. Although the accountant may have told petitioner that
he was estimating the excise tax, there is no evidence that the
accountant told petitioner that he had prepared petitioner's
Federal income tax returns using the estimated excise tax. The
accountant prepared petitioner's 1992 based on Form 1099 and
4Petitioner reported taxable income on his returns of
approximately $50,000 in 1988, $385,828 in 1989, $701,215 in
1990, and $430,095 in 1991.
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