- 20 -
1977, Mr. Dutton prepared an analysis of petitioner's records in
order to ascertain whether petitioner had received what he was
entitled to for the sale of the stock. In the course of that
analysis, Mr. Dutton summarized the total commissions received by
CTC from manufacturers from January 1, 1973, to June 30, 1978, as
reflected on the CTC receipts journal. He also reviewed the
numerous commission payments between CTC and Diesel Power during
those years. From his review, Mr. Dutton concluded that CTC had
received a total of $6,849,743.23 in commissions, and Diesel
Power actually had received $14,192,680.82 during this period.
Based upon Mr. Dutton's computation of amounts due from
commissions and his understanding of the commission splits, CTC
was entitled to an additional $395,016.07 from Diesel Power. Mr.
Dutton also concluded that the gross profits reported on
petitioner's original returns were correct, except for 1975 and
1976, which had understated commission income in the amounts of
$511,626.78 and $134,378, respectively. The understated
commission income was reported on amended returns for those
years. After these amended returns were filed, Mr. Dutton
concluded that, based on information about petitioner's holdings
available to him, all required amounts as reflected on the CTC
receipts journal had been properly included in petitioner's
income during 1975 and 1976.
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