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Federal income tax returns for 1991 and 1992 on August 11, 1994,
and March 21, 1994, respectively--much more than 5 months after
their respective due dates.
Petitioner understated the proper tax due on his Federal
income tax return for 1991 by $17,939 and for 1992 by $1,395.
This constituted an understatement of the proper tax due of
approximately 97 percent for 1991 and 70 percent for 1992.
Tesco Driveaway, Inc. (Tesco), was incorporated under the
laws of the State of Missouri on November 15, 1991. Prior to the
incorporation, petitioner operated the Tesco business as a sole
proprietorship.
Prior to August 1, 1991, petitioner asked his personal and
business accountant, Dal Livingood, owner of Diversified
Management Services, to prepare the necessary documentation to
incorporate Tesco. At petitioner’s direction, Mr. Livingood
prepared and submitted incorporation papers for Tesco to the
Missouri secretary of state on or about August 1, 1991.
The Missouri secretary of state returned the incorporation
papers unfiled due to some defect. Mr. Livingood remedied the
defect in the incorporation papers, obtained petitioner’s
signature on the revised incorporation papers, and resubmitted
them. The Missouri secretary of state accepted the resubmitted
documents, and Tesco was incorporated on November 15, 1991.
Petitioner failed to include on Schedule C of his 1991 tax
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