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June 30, 1990 and 1991, did not report any proceeds from the
sales of scrap metal. On its original tax returns, Simco
reported the following compensation for Neal and John:
Fiscal year Neal John
June 30, 1990 $297,150 $316,398
June 30, 1991 367,350 352,850
On its amended returns for fiscal years ended June 30, 1990, and
June 30, 1991, which were filed on or about September 25, 1992,
Simco reported the following income and claimed the following
deductions:
Net change Net change in
Fiscal year in income deductions
June 30, 1990 $54,178 $54,178
June 30, 1991 79,728 79,728
Each income adjustment was explained as an “increase in sales”,
and each deduction adjustment as an “increase in salaries”.
John’s Tax Returns
John’s original returns for his tax years 1989 through 1991
did not report proceeds from scrap metal sales. On his amended
returns, John reported the following income:
Net change
Calendar year in income
Dec. 31, 1989 $11,353
Dec. 31, 1990 210,734
Dec. 31, 1991 41,819
Each income adjustment was explained as “additional income”.
Notices of Deficiency
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Last modified: May 25, 2011