- 12 - Preparation of Petitioner’s Tax Returns Mr. Reiter’s office prepared petitioner’s tax returns for the years in issue. This included preparing the Schedule C related to the law firm. Mr. Reiter did not reconcile any personal accounts of petitioner or Mr. Ludlow in order to prepare these returns. Other than yearend statements showing the total interest or dividend income earned during the year, Mr. Reiter and his staff received no records regarding petitioner’s Merrill Lynch accounts or any other personal accounts. Unaware of the income petitioner diverted to her Merrill Lynch account, Mr. Reiter and his staff did not include it in any of the monthly financial statements, the annual income statements, or the income tax returns that Mr. Reiter’s office prepared for petitioner and the law firm. Audit of Petitioner In November or December 1991, Revenue Agent Francisco Rangel began a civil audit of petitioner and Mr. Ludlow’s 1988 return. On December 11, 1991, Mr. Rangel conducted his initial interview at the law firm. Pursuant to a power of attorney, Mr. Reiter represented petitioner and Mr. Ludlow at the meeting. Mr. Ludlow attended the meeting, but petitioner did not. Mr. Rangel asked about the law firm’s business bank accounts, and he was informed that the law firm had two accounts: The general operating account and the client trust account.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011