- 16 -16
The deficiency resulted from the following adjustments to their
income:
Description 1987
Gross receipts $1,661,551
Interest expense-Sch. C 116,321
Schedule C expenses: attorney 225,054
Schedule C expenses: La Posta 37,286
Schedule E: Fall Mansion 40,202
Capital gains and losses 407,576
Itemized deductions (11,351)
The bases for the adjustments made in the notices of
deficiency were the conclusions formed by Agent Red as a result
of his examinations.
V. The Docketed Cases
The petitions were filed in these cases on February 27,
1992. In each case petitioners assigned error to all of the
adjustments made in the notices of deficiency.
With respect to the omitted income adjustment, in her
petition Lawrence alleged that "the revenue agent used the bank
deposit method to determine that petitioner had realized
additional income without any inquiry of petitioner to identify
the nature of the deposits." Likewise, the Abrahams, in an
amendment to their petition, alleged that the "unreported income
was determined under the bank deposit plus cash expenditure
method without inquiry into non-taxable transfers and loans, no
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