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Using the bank deposits analysis indirect method of
determining income, Agent Red concluded that Lawrence understated
her income for the years 1986 and 1987. Agent Red also concluded
that many of the deposits made into Abraham's bank accounts from
checks drawn on one of Lawrence's bank accounts represented
income to him. The major adjustments (the omitted income
adjustments)2 in the notices of deficiency were made in
accordance with the conclusions drawn by Agent Red as a result of
his reviews of the various bank accounts maintained by either
Abraham or Lawrence. Because petitioners focused on these
adjustments in connection with the motions here under
consideration, we do likewise.
I. Federal Income Tax Returns
None of the relevant Federal income tax returns were placed
in the record. However, from other evidence presented we have a
limited understanding of what information was contained on
petitioners' returns.
A. Miriam Lawrence
Lawrence untimely filed her 1986 Federal income tax return
in October of 1988. She reported her salary from her employment
2In the notice of deficiency pertaining to Lawrence the
adjustment is entitled "Income". In the Abrahams' notice of
deficiency the adjustment is entitled "Gross receipts".
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