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Taxable Year Officer's Signature Officer's Title
1976 Mrs. Ida London Treasurer
1977 Mrs. London Director
1978 Mr. London Clerk
1979 Mrs. London Clerk
1980-85 Mr. London Clerk
Respondent's Determination
Respondent recomputed petitioners' taxable income for
1983 and 1985 using the net worth method of reconstructing
income. As the starting point for that computation,
respondent used the net worth shown on the financial
statement that petitioners submitted to the Broadway
National Bank in 1976, $251,597. Respondent then computed
petitioners' net worth for 1976 through 1985.
Respondent determined that petitioners had received
unreported income of $311,974 and $213,120 for taxable
years 1983 and 1985, respectively. The "explanation of
items" attached to the notice of deficiency issued to
Mrs. London states as follows:
It is determined that you realized additional
income [for 1983] in the amount of $311,974.00
because the comparison of all known expenditures
with all known receipts, as shown on Exhibit A
attached hereto, has established an understate-
ment of income. Since you failed to include
such additional income on your income tax return,
taxable income is increased in the amount of
$311,974.00.
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