Salvador Chavarria and Irene Chavarria - Page 3

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          returns were prepared by Franciso Javier Bencomo (Bencomo).  No             
          income or gross receipts from Autos Oti-Juarez were reported on             
          petitioners’ individual Federal income tax returns for 1990,                
          1991, and 1992.                                                             
               Autos Oti-Juarez was a cash business.  Petitioner paid cash            
          to purchase used cars for resale.  Salesmen were paid their                 
          commissions on sales in cash.  No business records from Autos               
          Oti-Juarez were provided to respondent's agents at any time.                
               Petitioners requested and received extensions to file their            
          1990 Federal individual income tax return, extending the due date           
          until October 15, 1991.  Petitioners’ 1990 return was filed a               
          year later on October 15, 1992.                                             
               Petitioners requested and received extensions to file their            
          1991 Federal individual income tax return.  Petitioners timely              
          filed their 1991 return on October 15, 1992.                                
               Petitioners requested and received extensions to file their            
          1992 Federal individual income tax return, extending the due date           
          until October 15, 1993.  Petitioners’ 1992 return was filed on              
          November 23, 1993.                                                          
                                       OPINION                                        
               Respondent determined that petitioners had failed to report            
          income from Autos Oti-Juarez on their individual Federal income             
          tax returns for 1990, 1991, and 1992.  Petitioners do not dispute           
          respondent’s determination that this income should have been                
          reported on their returns.  Petitioners are seeking, however, to            




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