Ragnhild A. Westby - Page 15

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          workpapers include a schedule summarizing petitioner’s                      
          documentation of her Schedule C income and expenses by category             
          and by year.  That schedule shows, for each of the years at                 
          issue, preliminary figures, adjusting entries, and final figures            
          for each category of income and expense.  The workpapers also               
          include a summary schedule for the years at issue showing the               
          income and expense information used by Mr. Aunan to prepare                 
          petitioner’s Schedule C (including depreciation claimed), a                 
          workpaper entitled “Business Interest” that lists interest paid             
          on petitioner’s credit cards, a depreciation schedule that shows            
          how Mr. Aunan calculated the depreciation claimed on petitioner’s           
          Schedules C, a workpaper entitled “Personal” that lists                     
          information regarding various Schedule A itemized deductions for            
          each of the years at issue, a workpaper labeled “611 Dayton”                
          relating to a rental property that petitioner owned and sold in             
          1987, and a Schedule C workpaper relating to the law practice of            
          petitioner’s husband.                                                       





               8(...continued)                                                        
          maintained that he could not tell how Mr. Aunan had combined                
          petitioner’s expenses to arrive at the numbers reported on her              
          income tax returns for the years at issue.  Respondent’s claimed            
          inability to understand how petitioner’s business expenses were             
          categorized for return filing purposes led to the detailed                  
          listing of petitioner’s expense records without regard to actual            
          reporting of the expenses on the relevant tax returns.                      





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