Gerard and Audrey Kathleen Hennessey - Page 10




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               On or about March 1, 1997, petitioners submitted an                    
          additional Form 1040 to the IRS for the 1993 taxable year with              
          “Amended” written on the first page, as well as on several of the           
          pages attached to the return (1993 “Amended” return).                       
          Petitioners reported a deduction for travel expenses of $29,978             
          on Form 2106.  Petitioners also deducted $21,594 for travel                 
          expenses on the Schedule C for ISOA Consulting.                             
               Petitioners reported adjusted gross income on the four 1993            
          returns submitted to the IRS as follows:                                    
                                             Adjusted                                 
                         Return              gross income                             
                    1993 “Estimated” return    $54,300                                
                    1993 Unsigned return     68,349                                   
                    1993 Return              32,937                                   
                    1993 “Amended” return    19,442                                   

          With the exception of the 1993 “Estimated” return which had no              
          schedules or forms attached, each of the 1993 tax returns sent by           
          petitioners to the IRS had double deducted expenses such as                 
          mortgage interest and real estate taxes.                                    
               On the Schedules C for ISOA Consulting, which were attached            
          to the 1993 returns, petitioners reported the following amounts:5           
                              1993            1993     1993                           
                         “Unsigned” return   Filed return   “Amended” return          
               Gross Income   $27,953         $17,936  $9,576                         
               Total Expenses       (35,659)         (40,707)         (46,674)        
               Net Loss       (7,706)         (22,771)         (37,098)               


               5 There was no Schedule C attached to the 1993 “Estimated”             
          return.                                                                     






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