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signed and issued to her an additional check for each of those
months that was drawn on petitioners’ joint checking account.
The total amount of the 11 checks that Ms. Whitehead issued to
Essie Whitehead during 1997 was $6,622. None of those checks
bore a notation as to their purpose. Essie Whitehead negotiated
each of those checks.
Petitioners’ IRA Contributions
During each of the years at issue, petitioners contributed
$2,000 to an IRA in the name of Mr. Whitehead and $2,000 to an
IRA in the name of Ms. Whitehead. During those years, petition-
ers did not withdraw any funds from any IRA.
Petitioners’ Federal Income Tax Returns
Petitioners jointly filed Form 1040, U.S. Individual Income
Tax Return (joint return), for each of the years at issue.
Norman Smith (Mr. Smith), petitioners’ accountant, signed each of
those returns as return preparer. In petitioners’ joint return
for each of the years at issue, petitioners reported Mr. White-
head’s occupation as “Executive” and Ms. Whitehead’s occupation
as “Hshld. Executive”.
In petitioners’ 1996 joint return, petitioners reported,
inter alia, wage income attributable to Mr. Whitehead of
$109,72212 and “Other income” of $8,975.13
12Petitioners attached to petitioners’ 1996 joint return
Form W-2, Wage and Tax Statement (Form W-2), for 1996 for Mr.
(continued...)
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