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received from Ken Cheers were deposited into the Cedar Grove bank
accounts.
Revenue Agent Pamela Reicks (Ms. Reicks) was assigned to
examine the tax liabilities of petitioner. Ms. Reicks first
obtained information and documents from within the Internal
Revenue Service through the information returns program. This
program compiles information on taxpayers based upon informa-
tional returns submitted to the IRS, such as Forms 1099 and Forms
W-2.
Ms. Reicks then contacted petitioner and requested
additional information. Petitioner responded that he believed
the current tax system was a voluntary system, and he had no
intention of volunteering and filing returns. Petitioner
therefore did not provide Ms. Reicks with the information she
requested. Ms. Reicks reviewed the materials she did possess and
concluded that she did not have enough information to determine
petitioner's income accurately.
In order to determine the amount of petitioner's income for
the years 1987 to 1993, respondent relied on data obtained from
the Bureau of Labor Statistics (BLS). This data detailed what it
would cost a family to live, given petitioner's profession as a
business consultant. Thus, using the BLS data, respondent
determined that petitioner earned income of $44,939, $46,747,
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