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During the years in issue, petitioner was not married, but
he filed as head-of-household claiming his parents as dependents.
Petitioner attached, inter alia, a Schedule C to each of his
income tax returns for 1998 and 1999. On each Schedule C,
petitioner identified his business activity code as 531210,
signifying an office of real estate agents and brokers. On each
Schedule C, petitioner claimed various deductions. After
concessions, and as relevant to the issues for decision, those
deductions were as follows:
1998 1999
Rent $11,100 $5,550
Repairs and maintenance 141 -0-
Utilities 510 549
Telephone 498 544
E. Examination of Petitioner’s Returns
At a time not disclosed in the record, respondent commenced
an examination of petitioner’s 1998 and 1999 returns.
On July 23, 2000, petitioner executed Form 2848, Power of
Attorney and Declaration of Representative, appointing Lorant as
his representative concerning income tax matters for the taxable
years 1993 through 2002. The Form 2848 specifically authorized
Lorant to sign consents. Lorant signed the Form 2848 on July 26,
2000. Respondent received the Form 2848 on September 12, 2000.
On July 17, 2001, Lorant executed on behalf of petitioner a
Form 872, Consent to Extend the Time to Assess Tax, consenting to
extend the period of limitation for 1998 to November 31, 2002
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