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parts business operating under the name B & D Auto Parts.
Mr. Judge did not know that petitioner had engaged in the
automobile parts business during the years in issue, nor
did he know of the unreported income earned by petitioner
from that business until the subject returns were audited.
When respondent’s agent asked Mr. Judge about the
checks that petitioner had received from BMAP, Mr. Judge
said that he would obtain an explanation of those items
from his client. Subsequently, he advised the agent that
the checks were “cash advances”. Shortly after that,
Mr. Judge withdrew his representation of petitioners, and
another individual, Mr. Kenneth Federman, undertook
petitioners’ representation. Initially, Mr. Federman
asserted that the checks had been issued to petitioner in
the course of his automobile parts business and the net
profit of the business was reflected in the Forms W-2
issued to petitioner by BMAP. Later, Mr. Federman withdrew
that assertion, and petitioners offered no other
explanation of the cash and checks paid to petitioner by
BMAP.
During the audit, Mr. Federman provided respondent’s
agent with a list that he said was a list of 100 vendors
from whom petitioner purchased the used automobile parts.
Respondent’s agent contacted each of the vendors by a
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Last modified: May 25, 2011