- 12 -
After an audit of Martin and petitioner’s joint Federal
income tax returns for 1981 through 1984, respondent charged
Martin with receipt of unreported embezzlement income as follows:
Year Embezzlement Income
1981 $ 415,169
1982 3,269,485
1983 5,375,207
1984 1,798,305
Respondent also disallowed for 1983 the claimed $600,000
Keogh deduction.2
The schedule below reflects the taxable income as reflected
by Martin and petitioner on their joint Federal income tax
returns for 1981 through 1984 and the corrected taxable income as
determined by respondent as a result of the omitted embezzlement
income, the disallowed Keogh deduction, and other adjustments:
Taxable Corrected
Year Income Reported Taxable Income
1981 $ (3,467) $ 411,777
1982 50,227 3,330,913
1983 240,751 6,256,003
1984 (223,789) 1,574,385
Respondent further determined additions to tax for fraud for
each year based on the above omitted embezzlement income, and
respondent determined the addition to tax for fraud for 1983 also
2 Petitioner has conceded certain other adjustments, and
petitioner acknowledges that, should petitioner be found eligible
for innocent spouse treatment, a Rule 155 computation is required
with regard to the conceded adjustments.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011