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van pool. (These canceled checks were not introduced into
evidence.) Mr. Bullock failed to maintain a mileage log or a
separate bank account for his van pool activities.
Mr. Bullock prepared a summary of his income and expenses at
the end of each year for use by his tax return preparer. On their
1993 and 1994 Federal income tax returns, the Bullocks reported
income, expenses, and net losses from the van pool activity as
follows:
1993 1994
Gross receipts $6,020 $2,007
Expenses:
Depreciation $980 $1,517
Insurance 3,000 3,000
Supplies 75 ---
Repairs --- 1,170
Taxes 403 1,213
Other 6,285 3,900
Total expenses 10,743 10,800
Loss (4,723) (8,793)
IRS’ Position and Determinations
Respondent determined that Messrs. Fields, Bullock, Sharpe,
and Peacock each received unreported cash distributions from 4 Leaf
Corp. from the bingo operations conducted at Buckroe. The amounts
now ascribed to each of them from these activities by respondent
are $13,604 for 1993 and $26,509.75 for 1994. (The deficiencies in
tax as set forth in the notices of deficiencies were based on
greater amounts of purported unreported income.)
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