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Petitioners resided in Glendale, California, at the time the
petitions were filed in these cases.
During all the years at issue Bobby E. Welch (petitioner)
was engaged in the electrical contracting business and had
several other ill-defined business activities. On the Federal
income tax returns for these years, petitioner reported the
following on Schedules C and claimed net operating loss (NOL)
carryovers as follows:
Year Gross Receipts Net Profit NOL
1986 $751,169 $7,713 $80,853
1987 79,453 2,992 71,149
1988 64,647 (166) 65,455
1989 104,940 8,665 60,197
1990 179,111 9,392 51,532
Petitioner did not keep books and records from which the
gross receipts could be verified. Respondent performed a bank
deposit analysis for each year. The following total deposits
were made to various bank accounts controlled by petitioner:
Year Total Bank Deposits
1986 $1,105,003
1988 150,181
1989 269,491
1990 422,926
The following table shows the deposit amounts that are still in
dispute:
Year Balance of Deposits
in Dispute
1986 $352,281
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