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Smith’s plan states: “My target customer market includes those
who would like to own their own home-based business. The ideal
customer is one who can benefit from the products or [sic] I am
marketing.” Mrs. Smith’s plans did not reflect any analysis of
the market she sought to operate in, any potential competitors,
her startup costs, the time required to recoup those startup
costs, or the time and potential to achieve profitability. With
each of these plans, it seems Mrs. Smith altered existing
materials provided by the companies. Mrs. Smith prepared no
written business plan for Cyberwize.
Petitioners engaged their accountant, Cheryl Clark, to
assist in the preparation of their income tax returns. Ms. Clark
is a certified public accountant (C.P.A.) licensed in the State
of Georgia. Mrs. Smith provided Ms. Clark with summaries of the
expenses and income with respect to her direct marketing
activities which Ms. Clark then used to prepare petitioners’
income tax returns, including the losses reported on petitioners’
Schedules C. The information Mrs. Smith provided was entirely in
summary form, and Ms. Clark was not asked to and did not attempt
to verify the amounts Mrs. Smith provided her.
In addition to preparing petitioners’ returns, Ms. Clark
provided Mrs. Smith with tax advice for her business. Ms. Clark
advised Mrs. Smith on how best to maintain the business records
for her business. When Mrs. Smith was contemplating becoming a
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Last modified: November 10, 2007