Robert G. Bacon and Barbara Bacon - Page 17




                                       - 17 -                                         
               Mr. Collins testified that he did not ask either Mr. Bacon             
          or Mrs. Bacon whether the $319,109 entry on the June 30, 1989,              
          balance sheet was a loan payable to Mrs. Bacon.  Furthermore, Mr.           
          Collins testified that he did not see any documents that would              
          indicate that the corporation owed Mrs. Bacon $319,109.18                   
          Petitioners did not provide corporate minutes, loan documents,              
          promissory notes, mortgage documents, or other documents that               
          would substantiate their assertion.                                         
               Mr. O’Malley, petitioners’new C.P.A., testified that he does           
          not know how Mr. Collins arrived at the loan payable figures that           
          appeared on Radtam’s Federal income tax return for the fiscal               
          year ending June 30, 1989.  Mr. O’Malley also testified that he             
          could not obtain any information about the loans payable account.           
               Radtam’s Federal income tax returns for the fiscal years               
          ending 1990, 1991, and 1992, were all filed in June of 1996.19              


               18Although he never asked petitioners about this, Mr.                  
          Collins testified that he thought the $319,109 was rent that                
          Radtam owed Mrs. Bacon.  If that were true, payments of rental              
          amounts due from prior years would appear to be income to Mrs.              
          Bacon in the year received.                                                 
               19Mr. Collins testified that Radtam’s Federal income tax               
          returns were not prepared or filed timely because details                   
          regarding cash disbursements were not available.  Each of these             
          income tax returns contained a Form 8275, Disclosure Statement.             
          The instructions to Form 8275 provide:                                      
               Form 8275 is used by taxpayers and income tax return                   
               preparers to disclose items or positions, except those                 
               taken contrary to a regulation, that are not otherwise                 
               adequately disclosed on a tax return for purposes of                   
               avoiding certain penalties.  The form is filed to avoid                
               the portions of the accuracy-related penalty due to                    
                                                             (continued...)           



Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011