- 3 - title (which in Texas is a car’s proof of ownership). Under the plan, Concord gave Washington Car possession of up to $100,000- worth of cars, thus giving Cox an inventory of vehicles that he could work on. In return, Cox promised to pay Concord $2,000 a week. These payments would accumulate from week to week, and Cox would draw on their accumulated value by periodically taking back drafts and titles for cars so that he could resell them to third parties at a profit. Cox and his wife reported Washington Car’s income and deductions on a Schedule C to their 2000 income tax return, which was prepared by Roman Spiller, their long-time accountant. Spiller was a former IRS auditor, and had prepared both the Coxes’ personal and business returns since 1986. Before this case they had never had any reason to doubt the quality of his work. The Schedule C for Washington Car’s 2000 tax year reported sales of $118,900, and aggregate expenses of $92,892. But Spiller got his signs confused and reported the difference as a net loss. The Commissioner’s service center noticed the math error, made the appropriate correction, and notified the Coxes that the resulting adjustments required them to pay tax due on the increase in taxable income, plus a penalty and interest. Spiller prepared and submitted an amended tax return on which the Coxes flipped the numbers from their original return, reducingPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011