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Amount of
Year Source of Income Income Reported
1993 Schedule C income $715
Interest income 20
1994 Wages 29,097
Dividend income 134
Schedule C income 670
1995 Wages 38,433
Interest 29
Dividends 141
Schedule C loss (3,534)
In 1993, petitioner husband purchased a house, which he sold
in 1994, resulting in a capital gain of $2,340.
Respondent determined that for taxable year 1993 petitioner
husband had unreported income in the amount of $28,933, and that
for taxable years 1994 and 1995, petitioners had unreported
income of $31,607, and $17,828, respectively. Respondent also
determined that petitioners had unreported capital gain of $2,340
in taxable year 1994.
In their petition, petitioners alleged that they did not
engage in any taxable activities during the years at issue.
Discussion
Generally, the Commissioner’s determinations are presumed
correct, and the taxpayer bears the burden of proving that those
determinations are erroneous. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). In certain circumstances involving
unreported income, respondent must make some minimal evidentiary
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Last modified: May 25, 2011