Michael G. and Kate M. Lavigne - Page 11




                                       - 10 -                                         

          and knowledge of the relevant facts to provide informed advice on           
          the subject matter.  Freytag v. Commissioner, supra at 888.                 
               Petitioners made no effort to ascertain the professional               
          background and qualifications of their return preparer.  They               
          examined the returns he prepared and admitted at trial that they            
          caused Mr. Beltran to revise the returns to reduce the claimed              
          expenses because they realized that the amounts claimed were                
          excessive.  Yet, petitioners knew that, with the revisions                  
          ordered by them, the expenses claimed were still excessive and              
          made no effort to have their returns corrected to reflect the               
          actual amount of their claimed deductions.  The Court notes that            
          the unreimbursed employee business expenses claimed on the                  
          returns, all related to Mr. Lavigne's employment, amounted to               
          32.6 percent and 37.4 percent, respectively, of the wages Mr.               
          Lavigne earned during 1998 and 1999.  Mr. Lavigne admitted in his           
          testimony at trial that he would not accept employment that                 
          required the employee to bear expenses of that proportion without           
          any reimbursement from the employer or some other source other              
          than himself.  Petitioners did not look beyond the                          
          representations of Mr. Beltran, knowing that the deductions at              
          issue were grossly inflated.  Petitioners knew that they could              
          claim only deductions that could be substantiated.  Petitioners             
          made no reasonable effort to ascertain their correct tax                    
          liabilities for the years at issue.  Stubblefield v.                        





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: May 25, 2011