Dave Graf Daimler - Page 10




                                       - 10 -                                         
               In 1990, Mr. Daimler and Ms. Mondragon maintained a personal           
          bank account No. 854-646952 at NCNB of Texas in Wichita Falls,              
          Texas (NCNB personal bank account).  During 1990, they deposited            
          $13,160.27 as “cash” or “misc.” into the NCNB personal bank                 
          account.  Mr. Daimler and Ms. Mondragon did not include the                 
          amount of those deposits in their joint return for 1990 and have            
          failed to show that such deposits were derived from a nontaxable            
          source.                                                                     
               During the taxable years ended January 31, 1990, January 31,           
          1991, January 31, 1992, and January 31, 1993, Dieter Electronics            
          maintained a bank account No. 858-214645-8 at NCNB of Texas in              
          Wichita Falls, Texas (NCNB corporate bank account).  The bank               
          statements and canceled checks from the NCNB corporate bank                 
          account were used to prepare the corporate returns of Dieter                
          Electronics for those taxable years.                                        
               Dieter Electronics overstated its “purchases” expense by               
          $49,924, $42,796, $36,646, and $40 for the taxable years ended              
          January 31, 1990, January 31, 1991, January 31, 1992, and January           
          31, 1993, respectively.  Dieter Electronics overstated its cost             
          of goods sold by $8,361 for the taxable year ended January 31,              
          1993.                                                                       
               During the years 1989, 1990, 1991, and 1992, the German                
          account earned interest in the amounts of $5,553, $3,936, $2,960,           
          and $4,150, respectively.  Mr. Daimler and Ms. Mondragon failed             






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