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Auto Sales and the business bank account. This information was
used by Mr. Solano in preparing the Schedule C (Profit or Loss
From Business) for R&X Auto Sales attached to petitioners'
Federal income tax returns for 1991 and 1992. However, Mr.
Solano was unaware that petitioners had a personal bank account
at Barnett Bank.
In the Schedule C for 1991, Mr. Ortiz, operating as R&X Auto
Sales, reported gross sales of $1,384,446, cost of goods sold of
$1,319,153, gross income of $65,293, total expenses of $56,535,
and a net profit of $8,758.
In the Schedule C for 1992, Mr. Ortiz reported that R&X Auto
Sales had gross sales of $3,303,511, cost of goods sold of
$3,085,454, gross income of $55,755, total expenses of $46,565,
and a net profit of $9,190.
On their Federal income tax return for 1991 petitioners
reported total taxable income of $25,049 and total tax of $2,433.
On their 1992 return petitioners reported total taxable income of
$22,163 and total tax of $2,075.
Petitioners did not report the interest they received from
Mr. Rodriguez ($18,000 in 1991 and $4,000 in 1992) as income on
their Federal income tax returns for those years. However,
petitioners provided respondent's agent with a reconstructed 1991
Puerto Rico income tax return that reported $18,000 as interest
income. The Department of the Treasury, Commonwealth of Puerto
Rico, provided respondent with a certified copy of petitioners'
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