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tax return.10 Mr. Lopez testified that whatever records relating
to petitioners that were in Mr. Hunt’s office were left there
following his death. He also testified that Mr. Assaad’s records
were returned to him as far as he knew and that he does not
withhold records in his practice “Even if they don’t pay you.”
Mr. Lopez also represented petitioners in the audit of their 1992
tax return. He testified that he experienced difficulty
assembling petitioners’ records for substantiation of expenses
and other costs, including interest, in part because of Mr.
Hunt’s death and in part because of Mr. Assaad’s lack of
cooperation.
In 1993, petitioners purchased, and began to rent out,
property known as St. Rose Manor. Petitioners overstated
depreciation deductions with respect to St. Rose Manor by at
least $148,747 for 1993, $324,033 for 1994, $324,033 for 1995,
and $324,033 for 1996, a total of $1,120,846 over the 4-year
period. Petitioners’ overstatement of the depreciation
deductions in 1993, 1994, 1995, and 1996, when corrected, reduces
the amount of the NOL carryforward available for 1996 and 1997.
10Mr. Hunt continued to work with Mr. Lopez, and he handled
all the clients he previously serviced. Mr. Lopez testified that
he thought Mr. Hunt was handling petitioners’ returns when he
died, but he could not be certain. Mr. Lopez signed petitioners’
return for the 1992 taxable year; however, he was unsure whether
he or Mr. Hunt prepared that return. Mr. Hunt and Mr. Lopez did
not prepare any of petitioners’ returns for years after the 1992
taxable year.
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Last modified: May 25, 2011