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after the last year in issue, petitioner prepared a document from
his own memory in which he estimated the number of miles that he
drove his van for business in 1988, 1989, and 1991.
C. Income Tax Returns for Cost Less and Petitioners
Lawrence I. Subrin (Subrin) was Cost Less' accountant during
the years in issue. Subrin prepared returns for Cost Less (Forms
1120) for 1988, 1989, and 1991. Cost Less filed its Federal
income tax returns for 1988 on September 1, 1989, for 1989 on
September 19, 1990, and for 1991 on September 17, 1992. About
November 7, 1990, Cost Less filed an amended return for 1989 that
Subrin had prepared.
In September or October 1993, petitioner asked Don Bailey
(Bailey), a certified public accountant since 1983, to review
petitioners' business and personal taxes. Bailey was
petitioners' accountant from then through the date of trial.
Bailey has three bachelor of arts degrees, a master of business
administration degree, and he has completed about half of the
hours required for a master’s degree in taxation.
Bailey prepared joint Federal income tax returns for
petitioners for the years in issue (1988, 1989, and 1991).
Petitioners filed them on November 5, 1993.
Bailey asked petitioner about the $175,000 payment to
Jasiak. Bailey asked Zirkle whether there was a covenant not to
compete. Petitioner and Zirkle explained the circumstances
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