Scenario: Assume once again we are working at a CPA firm. We have a client who has started their own Painting Business and they have not been keeping good records for Revenues and Expenses for their new business.

We have talked with them over the phone about the documents they should keep on hand for purposes of preparing their tax return each year. We now have decided that we should write them a letter showing them what will happen if they do not keep good records by showing them a recent court case.

Please complete a memo explaining to our client the Westby Tax Court Case. Point out and explain taxpayer's business, their lack of recordkeeping, the court ruling and fines assessed to the taxpayer

I found this court case using the following website.

US Tax Court Website:

http://www.ustaxcourt.gov/UstcInOp/asp/HistoricOptions.asp