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amount of the fees paid for petitioner's notary services. The
notary fees from January 1 through June 30, 1990, totaled $2,119.
To determine petitioner's notary income for her 1990 taxable
year, Agent Donovan multiplied the $2,119 of notary income, as
disclosed in the notary journal, by two, resulting in $4,238, and
then rounded down to $4,000. To determine notary income for
petitioner's 1991 taxable year, Agent Donovan increased $4,238
($2,119 multiplied by two) by 40 percent (based upon the 40-
percent increase in the number of returns prepared from 1990 and
1991, and the imputed 61-percent tax return preparation revenue
growth from 1990 to 1991), resulting in $5,933, and rounded up to
$6,000. Agent Donovan determined that petitioner's notary income
increased by 20 percent in 1992, resulting in $7,120, rounded
down to $7,000. Agent Donovan derived the multiplication 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.
We uphold respondent's method of reconstructing petitioner's
notary income because it is rational in light of all surrounding
facts and circumstances. See Palmer v. IRS, 116 F.3d at 1312.
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