11:00AM Blackwell redirects. Going over the details of S corporation again.
Blackwell asks witness if she expects clients to give her all sources of income for the taxable year. Yes says the witness.
So it's up to the tax payer to provide all the pertinent information? Yes says witness.
11:02AM Shea back at cross.
Shea says you can't remember exact conversation with Bernard in 2005 about 2004 tax return. No says witness.
Witness agrees that with clients of many years, some things are just assumed when filing their returns.
Shea says some clients are more accurate than others when reporting. Yes agrees the witness.
11:05AM Blackwell calls new witness, Alan Young head of the CPA firm Alan Young & Associates, to the stand. Has been managing director for 30 years. Has undergrad degree from Michigan State and is a CPA.
Witness says he manages a 30 member firm.
Has known Bernard since early 1990s. Started doing his returns in mid-1990s.
Says returns primarily done by Cassandra Jones and he reviewed them.
Witness's firm also help set up Maestro Associates. Taxed like a partnership as an S corporation.
Witness says they had discussed that all business money should be deposited into business accounts. Young says this was to be able to track income going into the business.
Witness says that income that goes into personal accounts not as important.
Young says with corporare entities all deposited for business were to be deposited into corporate account and all expenditures were to be deducted from that account.
Young says that had he known about large deposits into Bernard's personal account, he might have questioned it.
Young says he is pretty sure he reviewed Bernard's 2004 tax return. Blackwell shows document with Young's signature at the bottom. Majority of income that year came from Maestro Associates.
Young not aware Bernard deposited more than $123,000 into his personal account in 2004. Young says if that was money from the more than $300,000 reported income than it wasn't a problem but if it was additional income than it would have been a problem.
Young not aware of disbursement from employee pension plan in 2005 that should have been reported.
Was the 2005 tax return filed under penalty of perjury for Bernard? Yes says witness.
Looking at authorization to efile 2005 tax return. Bernard Kilpatrick's signature clearly on the document. Witness says that there should be ones for 2004 and 2007 but they could not locate the signed forms for them because they are only required to keep them for 3 years.
Witness says that 2007 tax returns were prepared using 2006 numbers to get it filed by October 15th deadline. Young says Jones discussed this with Bernard. The idea was to get an amended return later but it was never done.
Young says he did not personally go over the 2004, 2005 and 2007 returns with Bernard but expected that someone in his firm would have.
Young says he would not have efiled returns without the authorization of the client.
111:24AM Shea cross-examines.