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Mr. Beretta would stop by the restaurant occasionally in order to
retrieve his share of the skimmed proceeds. On October 25, 1993,
Mr. Beretta pleaded guilty to a Federal criminal conflict of
interest charge for abating a tax bill of the Atascadero
Peppertree Restaurant.
Respondent conducted a bank deposits analysis2 in order to
calculate the amount of unreported income, including skimmed
proceeds, that Mr. Beretta received. The amount of unreported
income calculated and determined for the years at issue is as
follows:
Year Skimmed Proceeds
1987 $11,835.61
1988 19,080.65
1989 37,482.13
1990 35,124.67
Total 103,523.06
2. Dividend Income
During the years at issue, petitioner maintained investment
accounts with Franklin Money Fund and Strong Total Return Funds.
The accounts were established with petitioner's funds.
Petitioner held one of the accounts as custodian for his
daughter, Jennifer Beretta, and three accounts in joint tenancy
with Jennifer Beretta. On his 1987 tax return, petitioner
2 The bank deposits analysis is conducted by examining
deposits into an individual's bank account. Reported income and
any nontaxable items are subtracted from total deposits in order
to determine unreported income.
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