- 16 -
Petitioner husband did not keep books and records (other
than checks) for his businesses from 1987 to 1989. He used
accountants to keep his books, balance his checking accounts, and
prepare returns from 1974 to 1986. He could not afford to use
accountants after 1986 because his business declined.
Petitioners reported on their 1988 and 1989 returns that
they owned several real properties that Americana formerly owned:
11420 Nashville, 14509 Mayfield, and 9550 Whittier.
10. Respondent's Examination
Respondent's revenue agents reconstructed petitioners'
income for 1987, 1988, and 1989 using the bank deposits plus
expenditures method. Revenue Agent Martin interviewed petitioner
husband on May 29 and October 23, 1990, and on September 17,
1991. Petitioner husband cooperated with Revenue Agent Martin
and Revenue Agent Andrews' investigation. He gave the agents his
checks, which were his only records of the transactions. He did
not make misleading statements to, or give misleading documents
to, respondent's agents.
The revenue agents identified all bank accounts for which
petitioners had signatory authority during the years in issue,
and obtained signature cards, monthly statements, canceled
checks, deposits slips, and deposit items for these accounts.
The agents analyzed the deposits made to these accounts, and
excluded all deposits that the agents believed were nontaxable,
including transfers between accounts. The agents also obtained
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011