Maurzal Frias and Teresa Frias - Page 3

                                        - 3 -                                         
          Petitioners maintained four bank accounts, two at the Bank of               
          Oklahoma, one at the Bank of Tulsa, and one at Sooner Federal               
          Savings and Loan.                                                           
               During an audit of petitioners' 1991 and 1992 Federal                  
          individual income tax returns (tax returns), the revenue agent              
          analyzed petitioners' bank deposits and determined that                     
          petitioners had underreported their gross income.  Petitioners              
          did not report any income from magic shows or band activities on            
          their tax returns.                                                          
               After the audit began, Mr. Gardner prepared detailed                   
          schedules of petitioners' bank deposits, including a calculation            
          of "total income", for the 1991 and 1992 years.  Cash withheld              
          from deposits3 was reflected on Mr. Gardner's schedules but was             
          not included in the total deposits.                                         
               Petitioners maintained check registers.  The deposits                  
          recorded in petitioners' check registers do not include cash                
          withheld from the deposits.  A summary of total deposits, as                
          calculated by the IRS, Mr. Gardner, and petitioners, for 1991               
          follows:                                                                    
                              Respondent's                  Petitioners'              
                              Audit          Mr. Gardner    Check Registers           
          Bank of Oklahoma    $18,585        $18,707        $18,711                   
          Withheld cash     2,320          ---              ---                       
          Bank of Tulsa       33,226         34,956         35,097                    
          Withheld cash     6,930          ---              ---                       
          Sooner Fed. S&L     13,982         13,981         13,571                    
          Withheld cash     1,416          ---              ---                       

               3  When petitioners deposited checks, they often withdrew              
          cash, depositing less than the amount of the check.                         


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

Last modified: May 25, 2011