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receipts and documents provided to him by intervenor when he
prepared the Schedule C of her business activity. The real
estate appraisal business realized $72,885 of gross income during
2002. Based on the receipts provided to him, the activity
realized a net loss of $1,582 for 2002. The record is unclear
whether intervenor reviewed the return after it was prepared, or
whether she was even given an opportunity to review the return.
Due to either an error by petitioner or a glitch in the
Turbo Tax software for the year in which the return was prepared,
the return was selected by the IRS for examination.2 Petitioner
was unable to meet with the revenue agent at the scheduled time;
however, intervenor met the agent alone. Intervenor failed to
substantiate any of the claimed expenses related to her business
because she was unable to locate the paperwork that petitioner
used as a basis for these claims. Consequently, all of the
claimed 2002 expenses of the real estate activity were
disallowed. See infra note 3. Intervenor agreed with the
agent’s determination, signed an agreement as to the audit
liability, and was assessed.
Respondent issued to petitioner a notice of deficiency on
November 5, 2004, for the additional tax liability. On February
1, 2005, petitioner filed a timely petition with this Court
2Petitioner contends that the Turbo Tax software for taxable
year 2002 contained a glitch that prompted him to enter some
items of income and expenses in multiple places.
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