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interest in the Bitker partnership, and each petitioner wife has
held a 20-percent interest.
During the years at issue, petitioner husbands conducted all
of their farming activity through the Bitker partnership. Jerry
Bitker is responsible for the day-to-day bookkeeping of the Bitker
partnership’s income and expenses.
Some of the farm crops were processed and sold through several
cooperatives. Only active farm operators could purchase shares
(and thus become members) of these cooperatives. In most
instances, shares of stock in the cooperatives were issued to
petitioner husbands (as opposed to the Bitker partnership).
Nonetheless, petitioners accounted for their shares of the
cooperatives’ income through the Bitker partnership.
B. The Bitker Partnership’s Forms 1065
Earl Mostoller, a certified public accountant, is a member of
Drees, Riskey & Vallager, Ltd., an accounting firm that has
prepared the Bitker partnership tax returns since its formation.
Mr. Mostoller has prepared petitioners’ Forms 1040, U.S. Individual
Income Tax Return, and the Bitker partnership’s Forms 1065, U.S.
Partnership Return of Income, since 1985. Jerry Bitker provided
Mr. Mostoller with information as to the Bitker partnership’s
income and expenses, as well as loan records from the Farm Credit
Service. Loans made for partnership purposes were made in
petitioners’ names rather than in the name of the Bitker
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Last modified: May 25, 2011