- 9 - papers long before petitioner filed his 1991 individual income tax return. Respondent notes the 1992 and 1993 fiscal year corporate returns of Tesco, which petitioner signed, recite the incorporation date as November 15, 1991. Respondent also notes that petitioner re-signed the incorporation papers after they were returned by the State of Missouri due to a defect. Respondent asks us to infer that petitioner’s prior knowledge that the Missouri secretary of state had rejected the incorporation papers equals knowledge that an error was made in the allocation of income between petitioner’s individual and Tesco’s corporate return. We disagree. Even if petitioner knew that the incorporation papers had been rejected, respondent did not show that petitioner knew both that the $32,755 of income had been included in the corporate return and excluded from his individual return, and that the State of Missouri’s rejection of the incorporation papers required petitioner, as a legal matter, to include the income that was earned during the gap period on his individual return. Petitioner testified without contradiction that he relied on his accountant to prepare proper tax returns. His accountant knew all the facts regarding the rejected incorporation papers because he is the one who submitted them, received them back unfiled, and then fixed and resubmitted them. Yet, even at the time of trial, the accountant thought the income during the gapPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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