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(1) Employee benefits $97,212
(2) Payroll taxes 578,441
(3) Outside services 104,592
(4) Rent/lease
Vehicles/machinery/equipment 187,004
(5) Depreciation and
sec. 179 expense 407,075
These disallowed amounts are the amounts that petitioner claimed
in the referenced categories on his Schedule C.
E. Substantiation
Perez, no later than September 11, 2006, acknowledged errors
in every category of expense claimed on petitioner’s Schedule C
with the possible exception of depreciation. Neither Perez nor
petitioners kept books and records of expenses of the concrete
business for 2001 that reflected the deduction amounts claimed in
the categories listed on petitioner’s 2001 Schedule C.
F. Financial Statements
Perez prepared financial statements that she knew were
inconsistent with petitioners’ 2001 tax return, which she had
prepared. The financial statements made petitioner’s business
look more profitable than it appeared on his Schedule C. The
2001 profit and loss statement purporting to show petitioners’
2001 net income from the concrete business was intended to be
used to obtain a license in Nevada and showed $999,648 more in
net income than the net income reflected on petitioner’s
Schedule C.
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Last modified: November 10, 2007