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PetitionersAug. 12, 1986Oct. 15, 1987Dec. 26, 1988Oct. 1, 1989undated1
signed
Post- Aug. 13, 1986Oct. 15, 1987Dec. 29, 1988Oct. 25, 1989Sept. 20, 1990
marked
Received -- Oct. 16, 1987-- -- Sept. 24, 1990
Due date -- Oct. 15, 1987Oct. 15, 1988Oct. 15, 1989--
1 Signed by preparer on Sept. 12, 1990.
Criminal Investigation and Respondent's Determination
On November 1, 1989, special agents of the IRS Criminal
Investigation Division executed a search warrant on the nursery.
As a result, IRS agents seized several boxes of records. The
agents located the two sets of ledgers. On the same date,
Mr. Gandy gave his voluntary consent to a search of person,
premises or conveyance. As a result of the consensual search of
the Gandy residence, IRS agents seized several boxes of records,
including customer invoices, real estate records, financial
records, and $32,874 in currency.
For 1985, 1986, and 1987, respondent used the specific items
method to determine petitioners' income. Respondent
reconstructed petitioners' Schedule F income from the nursery's
records, using primarily the nursery's invoices. During the
course of the criminal investigation, IRS special agents sent a
form letter to more than 200 customers of the nursery requesting
information concerning their purchases from the nursery.
Information on petitioners' interest income from the mortgage
loans was obtained by contacting the individual borrowers that
were listed in the divorce records.
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