Chih H. and Chu F. Chu - Page 6




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               6)   The motion to withdraw the counsel of petitioners                 
                    was ordered from the court because Robert with CPA                
                    background charging $200/hr and did not prepare                   
                    the 1040 forms either as the supporting document                  
                    to the court and both parties.                                    
               7)   From the IRS booklets; When all the data are                      
                    available, the professionals require only hours to                
                    fill out 1040 forms; Actually, back to 1995, when                 
                    auditor Jennifer was in CPA’s office to examine                   
                    the taxable year of 1991; The CPA took only half                  
                    hour to accomplish the 1040 forms with schedule C                 
                    to auditor for information when all the receipts                  
                    and cancelled checks were copied by the auditor.                  
               8)   The reason to use official 1040 forms was easy to                 
                    communicate with the other party and should any                   
                    number in doubt, the taxpayers can have receipts                  
                    or cancelled check or bank statement to prove it.                 
                    To prevent IRS examiners to hide or delete items                  
                    or made partial report to jump to the conclusion                  
                    misleading the judgments; It must have the 1040                   
                    forms to be as the reference.  It does not matter                 
                    which 1040 forms to be used.                                      
               9)   The petitioner has been in electronics industry                   
                    for 16 years and being laid off from July 1991 due                
                    to the Eaton Corp. closed completely in Los An-                   
                    geles; Since the petitioners have no idea of ac-                  
                    counting/book keeping, every year must have the                   
                    CPA/tax specialist to prepare the 1040 forms.                     
               10) In 1992, petitioner could not find the right job                   
                    after being laid off For almost one year starting                 
                    to do import/trade business using the Savings or                  
                    IRA funds to purchase the goods.  The Cost of                     
                    goods in the year 1992 was Around $54,000 plus the                
                    operation expenses of startup this new field of                   
                    business.  Definitely, the operating expenses                     
                    (Schedule C) for this new trade business was far                  
                    more than the profits of selling the products.  It                
                    does not matter which official forms (1040 EZ or                  
                    1040A) to be used; The results of the income loss                 
                    (profits) should be the same.                                     
               11) It does not matter what method to be used to anal-                 
                    ysis the new startup business; The bank saving                    
                    dropping from 1991 to 1993 indicated the seeds                    





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