- 8 - income determined under the bank deposits method of proof is taxable to petitioner. In the related case of Adair v. Commissioner, T.C. Memo. 2000-110, docket Nos. 12103-97 and 20465-97, also filed this date, we charge the Adairs with the other half of the income of the roofing business relating to deposits into the checking account. For each year in issue, our calculations of petitioner’s taxable income are set forth below. The bank deposits that are identified as gross receipts of the roofing business are multiplied by the average net profit margin for roofing contractors, producing a partial taxable income figure for the roofing business. Added to this partial net income figure are the unidentified bank deposits to calculate total taxable income relating to the deposits to the checking account, one-half of which is then charged to petitioner. Bank Deposits Net Income Identified as of Roofing Gross Receipts Average Business on Unidentified One-half of Roofing Net Profit Identified Bank Taxable Charged to Year Business Margin Bank Deposits Deposits Income* Petitioner 1993 $490,009 20% $ 98,002 $ 17,727 $115,875 $57,938 1994 426,843 25% 106,711 51,061 157,939 78,970 1995 197,965 18% 35,634 133,369 169,032 84,516 * As indicated, also included in the taxable income for each year is interest income relating to the checking account in the respective amounts of $146, $167, and $29. Under section 6651(f), an addition to tax of up to 75 percent applies where the failure to file a Federal income tax return is due to fraudulent conduct. See DiLeo v. Commissioner,Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
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