- 8 - that petitioner had unreported income in the amount of $26,987. On November 26, 1996, respondent issued a statutory notice of deficiency. Ms. Dickerson's report reconstructing petitioner's income was attached. The notice of deficiency listed the following adjustments to petitioner's income: (1) $44,471 increase in Schedule C net profit resulting from the $26,987 of unreported income determined by Ms. Dickerson's reconstruction of petitioner's income and the disallowance for lack of substantiation of $17,484 in deductions for Schedule C business expenses; (2) $2,350 increase of "other income", representing petitioner's gain on the truck sale; and (3) $6,166 increase in rent income, resulting from petitioner's $2,800 computational error plus $3,366 of expenses disallowed for lack of substantiation. Following pretrial discovery, respondent made several adjustments to Ms. Dickerson's reconstruction of petitioner's income and recomputed petitioner's unreported income. Respondent determined that petitioner had unreported income of $25,648, $1,339 less than the unreported income originally determined by Ms. Dickerson and set forth in the statutory notice of deficiency. The following table sets forth Ms. Dickerson's initial reconstruction of petitioner's unreported Schedule C income and respondent's reconstruction and revised computation:Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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