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1986
Table 11 lists certain checks written on the Markette
account in 1986. The table shows the date the check was written,
check number, payee, and amount. Check Nos. 2137, 2148, and 2203
were signed by petitioner. The remaining checks were signed by
Betsy. Respondent determined that petitioner and Betsy failed to
report $12,447.69 of constructive dividends received from
Markette in 1986, the sum of the checks listed in table 11. In
the notice of deficiency, this figure was adjusted downward by
$788.07 for net constructive dividends of $11,659.62.13 See
supra note 9.
Table 11
Check
Date Number Payee Amount
Jan. 23 2137 American Express 1$5,076.65
Mar. 13 2148 American Express 11,447.00
Mar. 31 2203 American Express 958.18
May 10 2162 American Express 11,656.33
Sept.30 2200 American Express 86.42
Oct. 31 2213 American Express 39.00
Dec. 05 2220 American Express 11,017.50
Dec. 31 2227 VISA 2,166.61
12,447.69
13 The only explanation that respondent gives in the
notice of deficiency for this $788.07 negative adjustment is the
cryptic “Less JE[JB?] 284 11/30/86”. We have not found any
explanation in the record for this negative adjustment. Under
the circumstances, we shall subtract the $788.07 from whatever
amount we otherwise find to be the total 1986 constructive
dividends to Betsy on account of Markette payments of Betsy’s, or
her household’s, personal expenses. This subtraction is to be
applied in calculating income omissions resulting from fraud, as
well as total income omissions.
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