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The joint return for 1995 was signed by both petitioners and
a representative of J.E. & Associates (J.E. & Assoc.), of Las
Vegas, Nevada, as tax preparer, on November 18, 1996. The 1995
return was received by respondent’s Ogden/Las Vegas Service Center
on July 30, 1997.
On the Schedule C attached to their 1993 Federal income tax
return, petitioners reported Dormer & Louver’s gross receipts to be
$244,710, cost of goods sold to be zero, total business expenses to
be $237,571, and net profit to be $7,139.
On the Schedule C attached to their 1994 Federal income tax
return, petitioners reported Dormer & Louver’s gross receipts to be
$442,012, cost of goods sold to be zero, total business expenses to
be $435,262, and net profit to be $6,750.
On the Schedule C attached to their 1995 tax return,
petitioners reported Dormer & Louver’s gross receipts to be
$1,095,339, returns and allowances to be $454,387, cost of goods
sold to be $311,578, total business expenses to be $404,606, and
net loss to be $75,232.
Dormer & Louver’s gross receipts and business expenses for
1993, 1994, and 1995 were computed using the cash method of
accounting.
For tax years 1993-95, respondent determined Dormer & Louver’s
cost of goods sold and business expenses to be as follows:
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Last modified: May 25, 2011