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attributable to a computational error involving the 1988 White
Star compensation that petitioners contend respondent made in
determining the unreported gross receipts of Design Consultants
for that year (claimed 1988 computational error). In light of
petitioners' concessions, we find that an underpayment exists for
each of the years at issue.
Before turning to the question of fraudulent intent, we
shall address petitioners' contention regarding the amount of the
underpayment for 1988 insofar as it relates to the 1988 White
Star compensation. Respondent used the 1988 White Star compensa-
tion as a factor in determining under the bank deposits method
the unreported gross receipts of Design Consultants for 1988. In
addition, respondent made a determination in the notice that
petitioners have unreported income for 1988 of $49,525 attribut-
able to the 1988 White Star compensation. In petitioners'
closing statement at the conclusion of trial, they contended that
for 1988 there was a computational error in the bank deposits
method analysis used by respondent to determine Design Consul-
tants' unreported gross receipts. In an objection to a finding
of fact proposed by respondent, petitioners state the following
on brief: "Further, the adjustment for 'Compensation, White Star
Design, Inc.'; adjustment '1 p' for 1988 (Resp. Ex. F) is in
error. The '49,525' is reported on Petitioners 1988 1040,
Schedule C Part I, line 5, [sic] other income 49,525 (Resp. Ex
E)." As we construe petitioners' position at trial and on brief,
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