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other than the standard deduction for single filing status, and a
deduction for one-half the self-employment tax determined by the
notice.
Also on November 18, 1998, respondent sent a statutory
notice for 1993 to Ms. Ghavami, which stated that an identical
amount of unreported business gross receipts (i.e., $104,786) was
includable in her income. At some time or times, Ms. Ghavami and
petitioner lived at the same address.
Approximately 1 year before respondent sent the notices to
petitioner and Ms. Ghavami, the Commissioner sent a statutory
notice to Universal for 1993. The notice to Universal stated
that Universal had $21,711 of unreported gross receipts. Because
Universal had reported $83,075 of gross receipts on its 1993
fiduciary income tax return (Form 1041), the notice reflected a
determination that Universal’s 1993 gross receipts were $104,786,
the same amount of income set forth in the notices sent to
petitioner and Ms. Ghavami.3
The notice to Universal stated that the amount of unreported
gross receipts was determined using the bank deposits method.
3 The notice to Universal also disallowed, for lack of
substantiation, Universal’s claimed deductions for $51,865 of
expenses and $31,210 of distributions. Petitioner asserts that
if payments made to Universal are includable in his income, he is
entitled to deduct many of the expenses paid by Universal on his
behalf. Respondent contends that almost all amounts paid by
Universal were petitioner’s nondeductible personal expenses, not
trade or business expenses.
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