- 6 -
Subsequent to the discovery of the undisclosed personal
accounts, Revenue Agent Caid and Special Agent Chisenhall of the
Internal Revenue Service's Criminal Investigation Division met
with the Gilchrists and examined all of petitioners' bank
records. The agents found that Door Control failed to report,
and diverted into the Gilchrists' personal accounts, corporate
income of $94,983.42 in 1986, $66,173.01 in 1987, and $105,891.87
in 1988. The Gilchrists had not provided Mr. Crim with any
information concerning this income.
On May 25, 1990, the Gilchrists met with Revenue Agent Caid
and Special Agent Chisenhall and agreed to write and sign
affidavits. Mr. Gilchrist admitted in his affidavit: (1) Door
Control's 1986, 1987, and 1988 corporate returns were "not true,
correct, and accurate"; (2) he and Mrs. Gilchrist misclassified
personal expenses as business expenses; (3) Door Control paid and
deducted personal expenses of the Gilchrists; and (4) on
individual returns for 1986, 1987, and 1988, he failed to report
personal income but deducted associated expenses. Mrs. Gilchrist
adopted Mr. Gilchrist's statement in her own affidavit.
On its 1985, 1986, and 1987 corporate returns, Door Control
carried back a net operating loss from 1988 and deducted a
portion of this loss on each return. In addition, on its 1986,
1987, and 1988 corporate returns, Door Control (1) reported
taxable income of $0, $6,997, and ($22,932), respectively, and
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011