- 11 -
1988 1989 1990 1991
Mathematical errors: --— $71,907 $78,361 $368,032
Less reductions for
nontaxable items &
credits:1 (284,603) (150,922) (268,424) (434,422)
Plus cash expenditures2
and debits:3 32,467 173,989 49,962 75,387
Net adjustments to
statutory notice: (252,136) 94,974 (140,101) 8,997
1Items that reduce petitioners’ taxable income. The parties have
stipulated that these adjustments to respondent’s bank deposit analysis are
proper.
2Including personal items paid by corporation.
3Items that increase petitioners’ taxable income. The parties have
stipulated that these adjustments to respondent’s bank deposit analysis are
proper.
Respondent has submitted schedules with his brief that show
petitioners’ unreported income for the years in issue is as
follows:
11988 21989 31990 41991
Total gross deposits:$843,032 $530,188 $1,285,386 $1,149,802
Less reductions for
nontaxable items, credits,5
& reported income: (740,724) (560,045) (1,067,222) (1,070,042)
Plus cash expenditures6
and debits:7 5,447 351,378 161,451 165,568
Adjustments to taxable income: 8107,755 9321,521 10379,615 11245,328
1See appendix I for details.
2See appendix J for details.
3See appendix K for details.
4See appendix L for details.
5Items that reduce petitioners’ taxable income. The parties have
stipulated that these adjustments to respondent’s bank deposit analysis are
proper.
6Including personal items paid by corporation.
7In the bank deposit analysis incorporated in the statutory notice,
respondent included net salary deposits of amounts earned by Mrs. Bacon. The
same analysis credits petitioners with the gross amount of her salary rather
than the net salary included in petitioners’ bank deposits. Accordingly,
respondent increased petitioners’ income from bank deposits by the difference
between Mrs. Bacon’s gross salary and her net salary (salary deposited).
8We note that respondent’s proposed adjustment to petitioners’ 1988
taxable income is $2,570 less than what we arrive at when subtracting the
agreed upon adjustments to the bank deposit analysis from respondent’s initial
computations under the bank deposit analysis. ($362,461 - $252,136 - $107,755
= $2,570)
9We note that respondent’s proposed adjustment to petitioners’ 1989
taxable income is $146 less than what we arrive at when subtracting the agreed
upon adjustments to the bank deposit analysis from respondent’s initial
computations under the bank deposit analysis. ($226,693 + $94,974 - $321,521 =
$146)
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