- 6 -
for bonding services were deposited into the in-house account.
The moneys from the in-house account were then disbursed for four
purposes: To satisfy petitioner’s liability in the event of
forfeitures, to satisfy required increases in the amounts in the
Charleston County Court and U.S. District Court accounts, to pay
petitioner’s business expenses, and to pay petitioner a
“salary”.5
Petitioner reported gross receipts from his bonding business
of $80,456 in 1992 and $100,467 in 1993. However, for taxable
years prior to and including 1992 and 1993, petitioner did not
report as income the amounts that were deposited into the three
accounts. The balances in the accounts were as follows on the
dates indicated:
1/1/92 12/31/92 12/31/93
Charleston County $393,000 $537,000 $628,000
Court account
U.S. District Court 55,000 30,000 30,000
account
In-house account 107,909 79,636 92,699
Total 555,909 646,636 750,699
In the notice of deficiency, respondent determined that
petitioner’s method of reporting bail bond fees did not clearly
reflect income, and that a change in method of accounting was
5 Petitioner’s testimony regarding his salary is limited and
vague. On the basis of his testimony, the amount of the salary
appears to have been either a percentage of the fees he collected
or a percentage of the amount in the in-house account.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011