Robert and Clara Satriana - Page 5




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          $70,690 and $72,320, respectively, for 1998 and 1999.  For 1999,            
          petitioners reported a net loss of $5,148 from the Mary Kay                 
          Cosmetics business activity.  Petitioners claimed itemized                  
          deductions on a Schedule A, Itemized Deductions, of $39,903 and             
          $31,737, respectively, for 1998 and 1999.                                   
               Prior to the years in question, petitioners prepared their             
          own tax returns.  For 1998 and 1999, they engaged the services of           
          a return preparer, Robin Beltran, to prepare their returns for              
          those years.  Mr. Beltran was recommended to petitioners by                 
          several people.  In preparing their returns, Mr. Beltran did not            
          rely on any records or substantiating information to support the            
          expenses and deductions claimed on the returns.  He explained to            
          petitioners that records were not necessary and that taxpayers              
          were allowed to deduct expenses based upon their income levels.             
          Petitioners, at one point, expressed reservations to Mr. Beltran            
          regarding the amounts claimed on the returns, particularly with             
          respect to their charitable contributions.  As Mrs. Satriana                
          testified at trial:3                                                        

               And when we looked it [the returns] I asked him, aren't you            
               kind of like transposing some of this stuff.  I said, We               
               don't have 5,000-and-some-dollars' worth of cash that we've            
               given out.  I don't have any receipts for that.  I don't               
               keep receipts.  I don't ask the church to give me anything.            


               3    This case is one of numerous cases heard by the Court             
          involving tax returns prepared by Mr. Beltran, which essentially            
          involve the same deductions.                                                




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