Michael White - Page 5




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               The 1998 return prepared by Mr. Beltran reflected an                   
          overpayment of $3,983, an amount which surprised petitioner.  He            
          questioned Mr. Beltran about the size of the refund, as he                  
          testified at trial:                                                         

               How do you get that much money back?  I haven't been getting           
               that type of return back myself.  I don't know that much               
               about taxes.  That's why I'm hiring you, but how does that             
               work?  How do you do that?  Well, Mr. White, that's why                
               you're hiring a tax professional.  That's why you come to a            
               CPA.  Because I study this for a living.                               
                    There are loopholes that you can't find on your own               
               that I can find for you.  Therefore, you have a larger                 
               return, and because I'm able to find those loopholes for               
               you, you'll keep coming back to me.  And by the way, if you            
               can refer people to me and tell them what a good job I've              
               done for you, I'll give you a break on next year's taxes.              
                    Mr. Beltran, you're a wonderful guy.  Thank you for               
               your assistance.  How can I spread your name around?  Well,            
               let me give you a stack of cards.  And of course, he gives             
               me a stack of cards, Robin the tax man.                                
                    So I start telling other people about him and talking             
               to other people that have used him before.  Yes.  He did the           
               same thing for me.  He did a great job.  So that was '98, I            
               believe.  I used him for 1999.  I used him for the year                
               2000.  Did not realize that there was a problem until 2001,            
               when I got the first notice of audit, and then all alarms              
               went off.                                                              

               In spite of his reservations about the refunds for the 2               
          years in question, petitioner did not review the returns or                 
          ascertain what deductions claimed on the returns accounted for              










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