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On or about June 30, 1997, Beacon submitted a second Form
1120S for the taxable year 1994 with “Amended” written on the top
of the first page (Beacon’s 1994 “Amended” return). On Beacon’s
1994 “Amended” return, Beacon reported total income and total
deductions of $4,936 and $17,760, respectively, for a loss of
$12,824. The total deductions included travel expenses of
$9,887.
On or about March 14, 1997, Beacon submitted a 1995 Form
1120S with “Amended” written on the top of the first page
(Beacon’s 1995 “Amended” return).7 On Beacon’s 1995 “Amended”
return, Beacon reported total income and total deductions of
$6,454 and $14,870, respectively, for a loss of $8,416. The
total deductions for 1995 included travel expenses of $5,615.
Beacon filed a Form 1120S for the taxable year 1996. On the
1996 Form 1120S, Beacon reported total income and total
deductions of $10,564 and $12,540, respectively, for a loss of
$1,976. For 1996, Beacon deducted travel expenses of $6,572.
C. ISOA, Inc.’s Tax Returns
On or about July 10, 1995, respondent received ISOA, Inc.’s
Form 1120S for the 1994 taxable year (ISOA, Inc.’s 1994 return).
ISOA, Inc.’s 1994 return was prepared on the cash basis method of
accounting. ISOA, Inc., reported gross profit of $18,749 and
7 Based on the record, there is no indication that Beacon
submitted any other 1995 return prior to Beacon’s 1995 “Amended”
return.
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Last modified: November 10, 2007