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explanation of Design Consultants' unreported gross receipts for
1988 that is contained in the notice (1988 explanation), respon-
dent determined the total amount that petitioners deposited into
their bank accounts for that year and the portion of those
deposits that constituted gross receipts of Design Consultants.
In determining the portion of petitioners' total bank deposits
for 1988 that constituted gross receipts of Design Consultants,
respondent reduced the total amount of petitioners' bank deposits
that respondent determined for that year by what respondent
determined to be petitioners' deposits from nontaxable sources,
transfers that petitioners made between their bank accounts, the
total amount of petitioners' rental income,13 and "Wages"
con-sisting of the $49,525 of 1988 White Star compensation.
Respondent determined that the balance of petitioners' bank
deposits for 1988 constituted gross receipts of Design Consul-
tants for that year. Respondent then reduced the gross receipts
of Design Consultants that respondent determined for 1988 by
"Income per return" in order to determine Design Consultants'
unreported gross receipts for that year. Respondent did not
13 Respondent first added the amount of rental income that
respondent determined was not deposited into petitioners' bank
accounts during 1988 to the total deposits that respondent
determined petitioners made into those accounts during that year
and that included petitioners' rental income for 1988 which
respondent determined petitioners had deposited into their bank
accounts. Respondent then reduced such total bank deposits
during 1988, as determined by respondent, by, inter alia, the
total amount of rental income that respondent determined peti-
tioners had for that year.
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