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Business, for those years. Respondent determined additional
income taxes of $40,076, $34,827, and $28,967 for 1989, 1990, and
1991, respectively.
The Schedule C adjustments arose from the operation of a
sole proprietorship, “United Contractors”, that was a trade or
business. Adjustments to petitioners’ 1989 income tax return
totaled $125,688, of which $111,515 arose from adjustments to
Schedule C. Adjustments to petitioners’ 1990 income tax return
totaled $106,896, of which $86,082 arose from adjustments to
Schedule C. All of the adjustments to petitioners’ 1991 income
return related to adjustments to Schedule C.
In 1994, petitioners paid interest of $21,979.19 to the U.S.
Treasury, of which $18,230.72 and $1,155.78 for 1989 and 1990,
respectively, related to adjustments to Schedule C. In 1995,
petitioners paid interest of $14,288.90, of which $6,899.63 and
$5,721.12 for 1990 and 1991, respectively, related to adjustments
to Schedule C.
Petitioners claimed a deduction for “other interest” of
$43,874 and $2,887 in 1994 and 1995, respectively, on their
Schedule C for interest that related to United Contractors.
Tax Return Preparation
Petitioners’ Federal income tax returns were prepared by
Thompson Greenspon & Company, P.C., of which Wilbert Thomas
Miller III (Miller) is a tax partner. Miller is also a certified
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