- 6 - Preparation of Petitioner’s Income Tax Returns Petitioner engaged Thanh Nguyen (Mr. Nguyen), an enrolled agent, to prepare her 1999, 2000, and 2001 Federal income tax returns. Petitioner filed Forms 1040, U.S. Individual Income Tax Return, for 1999, 2000, and 2001. Petitioner attached to each of those returns Schedules C, Profit or Loss From Business, reporting the following gross receipts, cost of goods sold, and expenditures for La Belle Vie: Gross Cost of Business Year Receipts Goods Sold Deductions Net Profit 1999 $428,595 $63,845 $331,957 $31,933 2000 412,763 85,618 272,495 54,650 2001 466,770 38,897 338,417 88,760 Petitioner’s business records consisted of her bank statements and canceled checks, and the parties agree that Mr. Nguyen prepared the returns based solely on canceled checks and statements from petitioner’s U.S. Bank accounts. Petitioner did not inform Mr. Nguyen of her tip income at the time. Petitioner did not report any of her tip income on her Federal income tax returns for the years at issue. Petitioner did not mention the tip income to Mr. Nguyen because she did not believe that tips were taxable. Indeed, petitioner became aware that tip income was taxable only when she was informed as such by her attorney during preparation for the trial of this case.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007