- 8 - bank deposits analysis prepared by their accountant showing that RAJ's 1991 and 1992 returns reflected substantially higher gross receipts than amounts deposited into RAJ's corporate accounts. Petitioners asserted that a large portion of the deposits to their personal accounts represented previously reported amounts on the returns of RAJ. Apart from the bank deposits analysis prepared by their accountant, petitioners did not provide any substantiation for their claim that a portion of the deposits constituted a distribution with respect to petitioners' stock. The Appeals officer rejected petitioners' assertions regarding the corporate source of deposits based on the following grounds: First, RAJ's corporate books and records were inadequate to establish the corporate gross receipts. Second, petitioners did not produce the original bank statements on which they relied but rather simply produced a summary statement prepared by their accountant. Third, contrary to petitioners' claim that a portion of the deposits represented distributions with respect to their stock, the 1991 and 1992 returns filed by RAJ showed no distributions to petitioners. Finally, given the inadequacy of RAJ's records concerning the cost of goods sold, there was no evidence that even if a portion of the deposits did represent gross receipts reported by RAJ, such deposits did not in fact represent taxable income to petitioners (for lack of basis in corporate stock). Respondent's Appeals officerPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011