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underreported in the returns they originally filed for each of
those years NDV's gross receipts for each such year. Each of
those amended returns increased by $5,200 the amount of the gross
receipts of NDV that petitioners had originally reported for each
of the years 1987 through 1989. Although the filing of those
amended returns is not evidence of fraudulent intent, it is
evidence of an underpayment of tax for each of those years. See
Badaracco v. Commissioner, 464 U.S. 386, 399 (1984); see also Old
Mission Portland Cement Co. v. Commissioner, 69 F.2d 676, 680
(9th Cir. 1934), affg. in part and revg. in part 25 B.T.A. 305
(1932); Roche v. Commissioner, 63 F.2d 623, 624 (5th Cir. 1933),
affg. 21 B.T.A. 1139 (1931).
In addition to the amended returns petitioners filed for the
years 1987 through 1989, on two other occasions, petitioners
admitted having gross income and/or gross receipts for 1987 and
1988 in excess of that reported in petitioners' return for each
of those two years. In the residential loan application signed
by petitioners during December 1987, petitioners indicated that
their monthly gross income was $5,000, or approximately $60,000
per year. In their return for 1987, they reported gross income
of only $21,094. Similarly, in an application for casualty
insurance for NDV that Mr. Katerelos signed and that is dated
April 8, 1988, he indicated that NDV had annual sales of
$360,000. In their return for 1988, petitioners reported that
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