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Petitioners’ Books and Records
In 1984 and 1985, petitioner personally developed a
computerized bookkeeping system or software program for keeping
track of expenses relating to petitioners’ various personal,
business, and investment activities. Petitioners’ bookkeeping
system represents a single entry system encompassing the debit
side of what is normally encompassed in a double-entry
bookkeeping ledger. Petitioners' computerized system is
homemade, but it does allow petitioners to track their expenses
and to sort and analyze expenses by activity to which the
expenses are charged, by job, by payee, and by a number of other
criteria.
Petitioners generally retained receipts relating to the
majority of their business and personal expenses, and such
receipts generally are still available.
As indicated, petitioners' computerized bookkeeping system
did not keep track of income. Relatively few transactions
produced large amounts of income for petitioners. Mrs. Kurzet
kept track of income received by way of separate records and
files. Generally, other than income on bank accounts and
security transactions, income petitioners received was deposited
into petitioners’ bank accounts. Copies of the deposit receipts
were retained in a file, and at the end of each year all income
was entered onto spreadsheets that were given to the accountants
who prepared petitioners’ income tax returns.
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