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for the general partner, had not been audited and that they
should not be relied on to indicate the actual results that might
be attained.
G. Petitioner’s Friend and Associate E.T. Jacobs
E.T. Jacobs (Mr. Jacobs), a former IRS agent and examination
manager, was a certified public accountant in private practice.
He was also one of petitioner’s friends and business associates.
In or about 1982, Mr. Jacobs became involved in the farming
of jojoba in Desert Center, California. Mr. Jacobs sold limited
partnership interests in a number of jojoba partnerships.
H. Petitioner’s 1983 Schedule K-1 and Income Tax Return
Petitioner received a Schedule K-1, Partner’s Share of
Income, Credits, Deductions, Etc., from San Nicholas for 1983.
The Schedule K-1 reported that petitioner’s distributive share of
partnership loss from San Nicholas was $37,064 for that year.
Petitioner timely filed a Federal income tax return (Form
1040) for 1983.9 Petitioner attached to his return page 2 of
Schedule E (Supplemental Income Schedule) and claimed thereon a
loss from San Nicholas in the amount of $37,064. Petitioner then
offset this loss against his other income. See supra p. 4.
I. Jojoba Partnership Litigation
San Nicholas was examined by the Internal Revenue Service,
9 The return was prepared by David Macher, a certified
public accountant in Riverside, California.
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