-21-
A. Were There Underpayments of Tax for 1989-92?
Petitioner did not file income tax returns for any of the
years 1989-92. Petitioner has stipulated that he received gross
receipts from his plumbing business, in amounts ranging from
$234,677 to $476,785 per year, in each of the years 1989-92.
Therefore, it is uncontested that petitioner had substantial
unreported receipts from a trade or business, in each of the
years 1989-92.
Petitioner has also stipulated that he had unreported net
business income, in amounts ranging from $55,812 to $205,270 per
year, in each of the years 1989-92, with only one exception: any
possible undocumented business expenses paid with cash or by
other nontraceable means.
Petitioner asserts he paid more deductible business expenses
than respondent allowed. We have found that petitioner is
entitled to some additional expenses, but there is no evidence
that petitioner paid expenses in amounts sufficient to offset his
stipulated receipts or net unreported income, in any of the years
1989-92. Mr. Sager's estimates of petitioner's income based on
the bid sheets, and Mr. Sager's estimates based on industry
financial ratios--both of which assume petitioner is entitled to
far more deductions than we have found--show that petitioner owed
tax for each of the years 1989-92.5 Therefore, petitioner's own
5 Petitioner's stipulated net business income, additional
deductions as found by the Court, and taxes owed as estimated by
Mr. Sager (based on the bid sheets) are:
(continued...)
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011