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Newman to be changed by Ms. Wade. Mr. Strong instructed Ms. Wade
to change the figures shown on the 1991 and 1992 returns as
originally prepared using handwritten sheets he gave her. Ms.
Wade changed the figures on the 1991 tax return by covering the
original numbers with correction fluid and writing new numbers
over them because she did not have a 1991 form at the time she
revised the return. She redid the 1992 return, but on a clean
form. The changes Mr. Strong instructed Ms. Wade to make to the
1991 and 1992 tax returns, originally prepared by Mr. Newman,
reduced the reported Schedule C profit on each return. Ms. Wade
also prepared Mr. Strong’s 1994 income tax return from a sheet of
paper provided to her that contained the income and expense
figures she placed on the return.
The Audit of Mr. Strong’s Income Tax Returns
In September 1995, respondent notified Mr. Strong that his
1990 and 1991 Federal income tax returns were under examination,
and in a meeting on November 30, 1995, at his residence, a
revenue agent advised him that his 1992, 1993, and 1994 returns
were also under review. In response to requests for his bank and
business records, Mr. Strong provided only handwritten summaries
of settlement sheets for five houses sold in 1991 and 1992.
Respondent’s revenue agent obtained information regarding the
construction business by issuing summonses under section 7602 for
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Last modified: May 25, 2011