- 9 - Petitioner timely filed his Federal income tax returns for each year in issue. He reported adjusted gross income of ($1,914) in 1993, $1,844 in 1994, and $3,559 in 1995. Petitioner’s reported tax liabilities were $362 in 1993, $280 in 1994, and $600 in 1995. Each of the returns petitioner filed during the years in issue, as well as those filed in 1991 and 1992, includes a Schedule C, Profit or Loss From Business, for Grand Video. Income, deductions, and profits or losses reported on the Schedules C are as follows: 1991 1992 1993 1994 1995 Gross income $19,459 $27,998 $47,722 $47,488 $43,956 Deductions 19,629 28,103 45,157 45,504 39,713 Net profit (loss) (170) (105) 2,565 1,984 4,248 With the possible exception of 1995, no deductions are claimed for wages paid in cash to petitioner’s employees during any of the years listed above. Each return was prepared by a paid income tax return preparer. With respect to the items listed on the Schedules C, petitioner provided the return preparer with the cash journal and bank records for the business account. For at least 1995, the return preparer relied upon petitioner’s statement as to the amount of income he earned through Grand Video.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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