- 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.Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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