- 10 -
Sometime after respondent's agent brought the above-
omitted amounts and certain disallowed deductions to
Mr. Cordes' attention during the audit, petitioner filed
Form 1120X, Amended U.S. Corporation Income Tax Return,
with the Internal Revenue Service Center, Austin, Texas.
On that return, petitioner reported additional gross
receipts in the aggregate amount of $425,955, composed
of the following items:
Deposits to account No. 312 $179,005.00
Late charges & collection fees 56,712.00
Bankruptcy collections 15,745.15
American Express payments 168,854.36
Martin's Restaurant payments 5,638.94
Total 425,955.45
The above items designated as payments to American
Express and Martin's Restaurant are payments for personal
expenses of Edmund J. Cordes and his family that were
deducted on petitioner's 1990 return as "Repossession
Costs".
Petitioner's amended return for 1990 claims a loss
in the amount of $336,912 to offset the additional
income reported on the return, and it makes reference to
an adding machine tape to explain the nature of the loss.
In substance, the adding machine tape states as
follows:
Cordes Finance Corp.
12-31-90
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Last modified: May 25, 2011