Alex and Tonja Oria - Page 4

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          performed all duties connected with its business.  Mr. Oria is a            
          college graduate, with a degree in business.                                
          Robert A. Loeser                                                            
               Robert A. Loeser (Mr. Loeser) is a certified public                    
          accountant with extensive experience in preparing tax returns.              
          In December 1999, petitioners hired him to resolve an employment            
          tax problem and to prepare tax returns for themselves and for               
          Medico.  Mr. Loeser set up Medico’s general ledger (the general             
          ledger).  He, or a member of his staff, made entries in the                 
          general ledger for 2000.  Mr. Loeser prepared the Form 1040; he             
          also prepared the Form W-2, Wage and Tax Statement, issued by               
          Medico to Mr. Oria for 2000, Medico’s 2000 Form 1120, U.S.                  
          Corporation Income Tax Return, and Medico’s quarterly employment            
          tax returns for 2000.                                                       
          The Form 1040                                                               
               The Form 1040 was erroneous, and taxable income as reported            
          thereon is to be increased on account of the following items:               
               Checks received from Medico                                            
               not reported on Form 1040               $248,524                       
               Personal charges on American                                           
               Express Card paid by Medico             32,580                         
               Deposits of Medico receipts,                                           
               net of payments on Medico’s                                            
               behalf, in personal bank                                               
               account                                 27,550                         
               Golf club dues and charges                                             
               paid by Medico                          5,150                          
               Total                                   313,804                        

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