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necessary business expenses. They include payment by GAPS and
JJM for several of petitioner’s trips during 1989.5 In total,
respondent disallowed expense deductions of $104,411 and $39,607
claimed by GAPS and JJM, respectively.
On the Mancusos' 1989 individual income tax return, Form
1040, petitioner reported wages of $4,000 from JJM and
nonemployee compensation of $6,259 from GAPS. Petitioner also
maintained an independent insurance agent license with
Massachusetts Mutual Insurance Co. (Mass Mutual); in 1989
petitioner earned gross wages from Mass Mutual, which he reported
on his 1989 Form 1040. After deductions and withholdings,
petitioner received net wages of $39,117.98, $38,412 of which he
deposited into the bank account of one of the corporate
petitioners.6
The Mancusos' 1989 individual tax return, Form 1040, was due
on April 15, 1990. The Mancusos did not request an extension of
time to file their 1989 Form 1040. On August 28, 1990, the
5Petitioner traveled to Kansas City, Missouri, from Mar. 3
through 5. He also traveled to Denver, Colorado, from Mar. 23
through 26. From June 11 through 18, petitioner traveled to Lake
Wales, Florida. From July 19 through 20, petitioner traveled to
Sacramento, California. Finally, petitioner made three more
Denver, Colorado, trips from Aug. 27-28, Sept. 9 through 13, and
Nov. 3 through 5, respectively.
6The record is unclear as to which corporate account
actually received the deposit. Because petitioner used the JJM
operating account for both corporations, we assume that the funds
were deposited in this account.
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