- 5 -
During 1994, Michelle Friscia was employed as a registered
nurse. Through mid-1994, Michelle Friscia also operated a
business selling household products through an Amway
distributorship.
In 1996, the Friscias’ neighborhood suffered a flood. The
Friscias assert that as a result of the flood most of the records
substantiating income and expenses for the years at issue were
destroyed, including Friscia Construction’s invoices and accounts
receivable and the records from the Amway business. Petitioners
did not reconstruct these records but did produce certain
substantiating documents such as bank statements, canceled
checks, check registers, and deposit slips.
Issue 1. The Friscias’ 1994 Taxable Income
The Friscias filed a joint 1994 Federal income tax return.
Upon audit, the Friscias were unable to produce detailed records
of their income. As a result, respondent employed the bank
deposits method of proof. Respondent determined that the
Friscias had gross deposits of $164,961 in 1994. After
concessions, respondent asserts that $82,586 of this amount is
unreported income.
Gross income is "all income from whatever source derived".
Sec. 61(a). This text is construed broadly to include all
“accessions to wealth, clearly realized, and over which the
taxpayers have complete dominion.” Commissioner v. Glenshaw
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