Lucila Novoa - Page 9

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                  Ms. Dickerson's               Respondent's Revised                  
                 Reconstruction                     Reconstruction                    

          Bank Deposit Portion             Bank Deposit Portion                       
          Total deposits         $85,924   Total deposits        $87,853              
          Nontaxable deposits              Nontaxable deposits                        
          Proceeds of truck sale  12,000 Proceeds of truck sale 12,000                
                                           Interbank transfers    22,500              
          Net taxable deposits    73,924 Net taxable deposits   53,353                
          Cash Expenditure Portion         Cash Expenditure Portion                   
          Total expenditures      85,932 Total expenditures     98,441                
          Check disbursements     89,773   Check disbursements    69,202              
          and savings account              and savings account                        
          withdrawals                      withdrawals                                
                                           Less disallowed        (6,166)             
                                           Schedule E expenses                        
          Cash outlays1             3,841 Cash outlays           23,073               
          Recomputed income       77,765 Recomputed income      77,765                
          Reported income         50,778 Reported income        50,778                
          Unreported income       26,987 Unreported income      25,648                


               1 Ms. Dickerson erroneously concluded that petitioner had              
          $3,841 of cash outlays, when $3,841 was the excess of total                 
          checks written over expenditures.                                           

               Respondent's recomputation of petitioner's unreported                  
          Schedule C income primarily differed from Ms. Dickerson's initial           
          computation in two ways.  First, respondent subtracted interbank            
          transfers between petitioner's accounts totaling $22,500,                   
          representing transfers from her savings account to her checking             




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