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that Russell’s capital account had a balance of zero at both the
beginning and the end of the taxable year. The Schedule K-1
attached to the 1994 Form 1065 listed the amounts in Melvin’s and
Russell’s capital accounts at the beginning and end of the
taxable year as “0". Russell signed BBP’s 1994 tax return.
Respondent claims that Russell should not be lightly relieved of
the sworn representations he made in BBP’s 1994 tax return.
Mr. Feldmann explained that the word “None” that was listed
on BBP’s tax returns for total assets and total liabilities for
1993 and 1994 did not mean that there were zero assets and
liabilities; rather the word “None” was the default position
generated by the computer software he used when no entry was
made. Likewise, Mr. Feldmann testified that the amount “zero”
for the capital accounts was also a default position when no
entry was made. Mr. Feldmann testified that he left these areas
blank because he did not have the information necessary to fill
in these areas on the tax returns. Mr. Feldmann explained that
had he made an entry, he would have put “not available” or
“information not available” in order to reflect the fact he did
not have the necessary information. BBP’s records were not
maintained in a manner sufficient to determine the partnership’s
assets and liabilities.25 Consequently, Mr. Feldmann did not
25We note that the estate claimed in its original and
amended returns for the taxable year 1995 that as of the date of
(continued...)
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