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Tithing
During the years under consideration, petitioners made
charitable contributions based on tithing. They tithed
approximately 10 percent of petitioner's annual profits to their
church. Petitioner determined the amount to be tithed each year by
using his brown books.
Ms. Bellamy met with petitioners after she had completed a
bank deposit analysis and reconstructed petitioners' expenses for
each of the years under consideration. During this meeting, Ms.
Bellamy asked petitioners to review her calculations to see if they
agreed with the income and expense figures. Petitioner suggested
that if Ms. Bellamy's figures matched petitioners' tithing, he
would agree with her numbers. He asked Ms. Bellamy to calculate 10
percent of the amount she determined as his gross profit. Ms.
Bellamy did so, and the result was close to the amount petitioners
tithed. Petitioner agreed with the agent's income analysis. He
told the agent that he always computed gross profit accurately for
tithing because "I'd never cheat the Lord."
OPINION
Issue 1. Unreported Income
Every individual liable for tax is required to maintain books
and records sufficient to establish the amount of his or her gross
income. Sec. 6001; DiLeo v. Commissioner, 96 T.C. 858, 867 (1991),
affd. 959 F.2d 16 (2d Cir. 1992). Where a taxpayer fails to
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Last modified: May 25, 2011