Emmett I. and Shirley Sindik - Page 4

                                        - 4 -                                         
          examination of his income tax returns for the taxable years at              
          issue.                                                                      
               Respondent, using the bank deposits method, determined that            
          petitioners had understated gross receipts and overstated various           
          business expense deductions for the years at issue.  Respondent             
          further determined that petitioners had unreported capital gain             
          in the amount of $38,700 from the sale of stock in 1990.                    
               Petitioners did not stipulate any facts prior to trial,                
          provided no documentary evidence other than their returns for the           
          taxable years at issue, and called no witnesses other than Mr.              
          Sindik, who did testify on behalf of himself and Mrs. Sindik.               
          Petitioner testified that he knows exactly the amount of money he           
          makes on every business transaction, but when asked by the Court            
          if he had any books reflecting these amounts, petitioner stated:            
          “I don’t keep books”.                                                       
          Gross Receipts                                                              
               The first issue for our decision is whether petitioners                
          understated gross receipts from Mr. Sindik’s business for taxable           
          years 1988, 1989, and 1990, in the amounts determined by                    
          respondent.  Respondent claims that petitioner failed to keep               
          adequate records and as a result respondent reconstructed                   
          petitioners’ income for the years at issue using the bank                   
          deposits method.                                                            
               It is well established that where a taxpayer fails to                  
          maintain adequate records, the Commissioner may prove the                   




Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011