John J. Burke and Vivian Burke - Page 11

                  Relying on certain transactions with respect to the above accounts,                   
            respondent determined that petitioners' gross receipts for the years in issue               
            were as follows:                                                                            

            1985                  1986                 1987                                             
            $263,609              $570,874             $90,646                                          

                  In her answer, respondent asserted an increased deficiency of $22,448                 
            for 1986 based upon additional funds that were transferred from Marine Midland              
            Bank--account no. 921-11974-7 to Ard Rhei, but which had not been included in               
            income pursuant to the notice of deficiency.7                                               
                  The banking transactions upon which respondent's notice of deficiency                 
            and claimed increase in deficiency are based are summarized8 as follows:                    

         Bank      Account       Account     Transaction                                                
          Name      Number         Title          Type        1985      1986       1987                 

         Marine  921-13312-0  John J. Burke   checks to              $41,800.00  $4,000.51              
         Midland               & Assoc.       Balsamo, John                                             
         MPC Premium    Burke, cash,                                                                    
         A/C            Jury's, and                                                                     
         Tobin                                                                                          

         Marine  921-69297-8   John J. Burke  cash       $53,500.00   50,500.00  31,400.00              


            7The claimed increased deficiency is based upon the following checks                        
            drawn on Marine Midland Bank account no. 921-11974-7 (John J. Burke &                       
            Associates):                                                                                

            Date      Check no.        Amount        Endorsement                                        
            06/02/86      1472           $5,000        Ard Rhei/Jury's                                  
            11/18/86      1739            2,500        Ard Rhei                                         
            11/19/86      1742            2,500        Ard Rhei                                         
            12/01/86      1750            1,548        Ard Rhei                                         
            12/03/86      1753            3,200        "For Deposit Only"                               
            12/11/86      1761            4,300        Ard Rhei                                         
            12/16/86      1770            2,200        Ard Rhei                                         
            12/23/86      1781            1,200        Ard Rhei                                         
            Total                       $22,448                                                         

            8A description of specific transactions upon which this summary is based                    
            is contained in the Appendix.                                                               






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