Ragnhild A. Westby - Page 14

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                         Additional     Additional     Total additional               
               Year       expenses      depreciation      deductions                  
               1987      $10,785.18     $741.28        $11,526.46                     
               1988      13,443.34      1,076.65       14,519.99                      
               1989      8,944.60       1,076.65       10,021.25                      
               1990      12,713.86      1,076.65       13,790.51                      
               As a result of respondent’s concessions regarding                      
          petitioner’s deductible Schedule C expenses, the deduction                  
          amounts still in dispute are as follows:                                    
                                        Respondent’s   Amount in                      
               Year      Per return     concessions     dispute                       
               1987      $76,198        $60,821        $15,377                        
               1988      121,459        78,962       142,497                          
               1989      115,690        87,183         28,507                         
               1990      124,543        87,423        37,120                          
               1The Court’s Oct. 17, 2000, order erroneously stated that,             
          after giving effect to respondent’s concessions, none of the                
          deductions claimed on petitioner’s 1988 Schedule C remained in              
          dispute.                                                                    
          V.  Return Preparation and Accountant Workpapers                            
               Petitioner’s income tax returns for the years at issue were            
          prepared by Mr. Aunan.  Petitioner gave Mr. Aunan her canceled              
          checks, cash and credit card receipts, and other documents,                 
          categorized in the manner described above.  Mr. Aunan prepared              
          accounting workpapers based on his review of petitioner’s                   
          records.  In so doing, Mr. Aunan grouped various categories of              
          petitioner’s Schedule C expenses into return preparation                    
          categories as reflected in his workpapers.8  Mr. Aunan’s                    

               8Throughout the trial in this case, however, respondent                
                                                             (continued...)           





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