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$122,038, $159,535, and $141,553 of gross income from his
insurance business for 1984 through 1987, respectively.
During the years in issue, petitioner was selling insurance
on behalf of Republic. Although petitioner received monthly
commission checks, petitioner did not report the commission
income he received from Republic because he did not receive a
Form 1099 reflecting it. Petitioner received at least $4,256 and
$6,585, respectively, in commission income from Republic.
During 1984, 1985, 1986, and 1987, petitioner received
commissions of $8,775, $24,707, $37,888, and $57,510,
respectively, from Dairyland. Petitioner received bimonthly
commission statements from Dairyland, but no Forms 1099, so
petitioner did not report the commission income he received from
Dairyland. Petitioner explained that he failed to report this
income because Dairyland told him that some of the payments to
him were not taxable because they were not "earned". Later,
petitioner testified that Dairyland did not understand what it
had said. Petitioner characterized Dairyland's statement as
"ignorant", but he claims to have relied on it nonetheless.
Petitioner prepared a profit and loss statement for his
insurance agency for the period of January 1 through May 31,
1986, which he submitted to South Bay Savings with a loan
application. Attached to the application were 1984 and 1985
"returns" prepared by petitioner which indicated gross insurance
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