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In respondent's determination for each year of additional
income to be charged to petitioner under the bank deposits method
of proof, it appears that respondent did not credit against total
unexplained bank deposits the specific items of income that
respondent charged to petitioner under the specific item method
of proof. Also, for lack of substantiation, respondent
disallowed the majority of the losses claimed by petitioner
during the audit relating to petitioner's investments.
For each of the years in issue, respondent also determined
that petitioner was liable for additions to tax for fraud and for
failure to pay estimated tax.
After trial, respondent made certain concessions and
adjustments. For 1984 through 1987, respondent adjusted downward
respondent's income determinations for petitioner to reflect
petitioner's tax basis that was established in many specific
transactions. For 1988 and 1989, without amending his answer,
respondent attempted to adjust upward respondent's income
determination for petitioner on the basis of deposits into two
additional checking accounts at Utah Central Credit Union that
respondent became aware of for the first time during trial.2
2 In respondent's brief, respondent asserts that for 1988 and
1989 petitioner received additional unreported income of $218,257
and $113,935, respectively, based on deposits into the two
additional accounts in petitioner's name at Utah Central Credit
Union.
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