Gregory A. Maslow and Marina Maslow - Page 4

          revenue agents (Revenue Agent Bank) in the fall of 1993.  As a              
          result, on October 12, 1993, petitioners filed delinquent tax               
          returns for 1988, 1989, 1990, and 1991.  On November 5, 1993, they          
          filed their 1992 tax return.                                                
               Petitioner did not maintain books or records pertaining to his         
          insurance business.  Petitioners did, however, maintain a checking          
          account at Maryland National Bank under the name Graded Assets              
          Management.  This account was used for both business and personal           
          purposes. Petitioner provided Revenue Agent Bank with bank                  
          statements and canceled checks that detailed most, if not all, of           
          his 1992 business activities.                                               
          Issue 1. Did Petitioners Underreport Their 1992 Income by $25,112?          
               Due to the absence of adequate books and records, Revenue              
          Agent Bank reconstructed petitioners' 1992 income using a bank              
          deposits analysis.  Through the use of this analysis, Revenue Agent         
          Bank determined that petitioners underreported their 1992 income by         
          $34,764. The $34,764 represents the difference between the                  
          aggregate amount of deposits to petitioners' Maryland National Bank         
          checking account ($80,096)2 and the income petitioners reported on          
          their 1992 tax return ($45,332) (the difference being the                   
          unidentified deposits).  At trial, respondent conceded that $11,628         
          of the original amount of unidentified deposits came from                   
          nontaxable sources.  Hence, respondent now asserts there is only            

               2    See supra note 1.                                                 

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