Gerald A. Sadler - Page 4




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          Petitioner's Taxes                                                          
               Petitioner prepared and timely filed his Forms 1040 for 1989           
          (1989 original return) and 1990 (1990 return).  Prior to April              
          15, 1990, petitioner prepared and filed a Form 1040X, Amended               
          U.S. Individual Income Tax Return, for 1989 (1989 amended                   
          return).                                                                    
               Petitioner prepared the Forms W-2 that he attached to his              
          1989 original return, 1989 amended return, and 1990 return.  The            
          Forms W-2 listed the following amounts as Federal Income tax                
          withheld:                                                                   
          Year       Employer           Federal Income Tax Withheld                   
          1989    Law Offices of                                                      
          Jerry Sadler, P.C.              $39,500                                     
          1989    Jerry Sadler,                                                       
          Attorney at Law, P.C.            13,720                                     
          1989    Sixty Eleven                                                        
          Kirby Corp.                      16,380                                     
          1990    J.S., P.C. doing                                                    
          business as Jerry                                                           
          Sadler, Attorney at                                                         
          Law, P.C.                        26,000                                     
               During the years in issue, petitioner's corporations did not           
          deposit with the Internal Revenue Service (IRS) any Federal                 
          income taxes on the wages earned by petitioner.  Petitioner                 
          solely was responsible for making these deposits.                           
               On his 1989 original return, petitioner (1) reported a                 
          $22,056.50 tax liability and $39,500.00 of Federal income tax               
          withheld and (2) claimed a $17,443.50 refund.  The IRS assessed             


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