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The amounts of gross receipts reflected on the Schedules C
attached to the 1987, 1988, 1989, and 1990 returns were $314,424,
$327,852, $287,986, and $711,960, respectively.
In addition to these discrepancies, other items of income
were not disclosed to petitioner’s return preparer and were not
reflected on any tax returns. First, during 1988, 1989, and
1990, certain withdrawals were made from Trust Accounts 1 and 2
that represented taxable income to petitioner. Second, during
1987 and 1990, certain fees earned by petitioner were not
deposited into any of the accounts maintained by petitioner in
connection with his law practice. During 1987 alone, the
unreported specific items total $634,252, while petitioner
reported only $314,424 of gross receipts.
Petitioner admits to receiving the unreported income, yet
alleges that the 1987 unreported income items were subsequently
deposited into the Business Account. Petitioner, however,
presented no evidence supporting this allegation. In addition,
these items that were allegedly deposited into petitioner’s
Business Account were never entered into the receipt books of
petitioner’s law practice. Furthermore, petitioner offered no
credible evidence that any of the unexplained deposits were from
a nontaxable source. In short, petitioner has not shown that
respondent’s income reconstruction is incorrect. Accordingly,
respondent’s determinations are sustained.
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