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For petitioner's 1992 taxable year, respondent determined
that petitioner had $146,000 of unreported tax preparation
income. A PIL for petitioner's 1992 taxable year was
unavailable. However, the record indicates that petitioner
prepared at least 3,000 returns in 1992. Agent Donovan testified
that $146,000 was a result of increasing his figure of $122,000
of unreported tax preparation income from 1991 by 20 percent,
yielding $146,600, rounded down to $146,000. Agent Donovan
derived the factor of 20 percent by using the 31 percent increase
in the comparative 3 days of receipts for the month of February
in 1990, 1991, and 1992 and reducing the percentage to 20 percent
to account for the fact that petitioner's tax preparation
business ceased on April 10, 1992.
Under these circumstances, we conclude that respondent's
method of reconstructing petitioner's 1990, 1991, and 1992 tax
return preparation income is reasonable. Therefore, respondent's
determination that petitioner had unreported tax preparation
income of $83,000, $122,000, and $146,000 for 1990, 1991, and
1992, respectively, is sustained.
Respondent also determined that petitioner had unreported
notary income of $4,000, $6,000, and $7,000 in 1990, 1991, and
1992, respectively. Petitioner's notary journal, which covers
the period from December 22, 1989 to August 9, 1990, includes the
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