Gail Carlett Dixon - Page 10




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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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