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Form W-2 as she had done in each previous year of their marriage.
No separate return was filed by petitioner for 1990.
Examination of Returns
Respondent examined the 1989 and 1990 returns and, on
September 9, 1993, mailed a separate notice of deficiency to each
of the spouses who were at that time again separated and in the
process of divorcing. Respondent determined the following
increases (decreases) in income:
Item 1989 1990
Income $15,982 $10,263
Business expenses 3,329 23,853
Depreciation (3,822) (5,755)
Early withdrawal penalty (311)
Self-employment tax deduction (1,952)
Itemized deductions 1,981
TOTAL $15,178 $28,390
Respondent used the bank deposits method to determine
unreported income. In determining the omitted income of $15,982
and $10,263, respondent took into account petitioner's W-2 wage
income, Mr. Womack's W-2 wage income, the loans from petitioner's
father and Joe Stroup, and the miscellaneous income items
discussed above; the omitted income was in addition to all of
those known sources.
The parties have stipulated that the Commissioner "has
accepted an aggregate amount of Schedule C expenses and cost of
goods sold and/or operations paid by David Womack" for the
property services business in the amount of $31,225 for the year
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