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convenience check issued by AT&T Universal Gold MasterCard into
one of their personal checking accounts.
F. Tax Returns
Petitioners timely filed “married filing separate” income
tax returns for both of the years in issue. In each of these tax
returns, the respective petitioner correctly showed that
petitioner’s spouse’s name and Social Security number at the
appropriate places. Their tax returns for 1989 through 1993 also
were “married filing separate”.
For 1994 and 1995 petitioners reported adjusted gross income
and total tax as shown in table 3.
Table 3
Michael Sandra
Year Adjusted Gross Total Tax Adjusted Gross Total Tax
Income Income
1994 $8,360 $1,314 $17,877 $1,068
1995 8,926 1,456 17,700 946
On the 1994 and 1995 Schedules C, Michael reported gross
receipts, cost of goods sold, expenses, and net profit for the
plumbing business as shown in table 4.
Table 4
Year Gross Receipts Cost of Goods Sold Expenses Net Profit
1994 $68,758 $44,780 $14,982 $8,996
1995 82,721 54,141 18,975 9,605
The tax returns for both petitioners were prepared by Jeanne
S. Duh� (hereinafter sometimes referred to as Duh�), a C.P.A.
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