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none of the requested documents was provided to the agent. The
agent then summonsed petitioner's bank records on January 7,
1993. On February 3, 1993, petitioner's attorney sent a letter
to the agent indicating that a response from petitioner was
enclosed with the letter. The record, however, does not include
petitioner's response.
On April 7, 1993, respondent issued a notice of deficiency
for petitioner's 1989 tax year. Based on information derived
from bank records and information obtained from audits of related
taxpayers, respondent determined net income adjustments totaling
$35,403. By far, the largest adjustment was additional income
totaling $42,831, which consisted essentially of the same kind of
items as generated the $25,205 adjustment for petitioner's 1988
tax year.5 Other adjustments included $150 taxable Social
5
Specifically, the items consisted of:
$ 3,000 Automobile allowance paid to petitioner by
Gold Country
9,580 Checks from petitioner's mother deposited
in petitioner's checking account
800 A deposit of currency in petitioner's
checking account
25,258 Deposited into petitioner's M & B Investment
Club account
3,904 Adjustment for personal living expenses
7,449 Amount received for sale of the Sharer
Accountancy client list
$49,991 TOTAL
Since petitioner had reported $7,160 of the above items as
Schedule C trade or business income, the $42,831 adjustment
represented net unreported income.
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