David K. Straight - Page 17

                                         17                                           
                              9012              9112           9212                   
               Per return     $1419282       $4147691       $3306595                  
               Per audit      2934384        4145992         3320229                  
               Adjustment     $15051021      $  (1699)      $  13634                  
               1 The correct adjustment for 1990 is $1,515,102.  Respondent does not  
          explain this discrepancy.                                                   
               The copy that respondent sent to petitioner did not disclose           
          that it differed from the original version.  The change makes the           
          letter appear more likely to be the letter to which the notice of           
          deficiency refers because the notice of deficiency states that              
          the letter furnished to the taxpayer was based on an examination            
          of Eagle's 1990, 1991, and 1992 years.                                      
               The Court held a hearing on October 29, 1996, relating to              
          petitioner's allegation that respondent had provided an altered             
          document to be included in the stipulation.  Respondent's agent             
          testified that she had not added the 1992 column to the report              
          and did not know who did.  The Court held a second hearing on               
          October 30, 1996, based on petitioner's allegation that the                 
          revenue agent's testimony was false.  At the second hearing,                
          respondent's agent testified that she had added the 1992 column.            
                                    II.  OPINION                                      
          A.   Tax Treatment of Eagle's Customer Deposits                             
               1.   Petitioner's Contentions                                          
               Petitioner contends that Eagle need not report all of its              
          customer deposits in the year received.  Petitioner contends that           





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