- 5 -
that he did not really have $72,516 and $15,956.97 in office
expenditures as he claimed on his returns and that his claimed
office expense deductions were false.
According to petitioner, the sources of nontaxable items
that he included in his 1993 gross receipts are: $6,250 in life
insurance proceeds from Cigna,4 $1,266 in life insurance proceeds
from Minnesota Life Insurance,5 and $65,000 in loan proceeds from
Sinh Hang.6 Additionally, petitioner asserts that the sources of
nontaxable items that he included in his 1994 gross receipts are:
4Petitioner produced a copy of a death certificate for Ms.
Aretha Payne and a life insurance certificate schedule issued by
the Life Insurance Co. of North America reflecting a policy limit
of $25,000 on the life of Aretha Payne. Petitioner testified
that upon the death of his mother, he and his three siblings
shared the proceeds from the $25,000 policy equally. However, the
life insurance certificate does not indicate who benefits under
the policy.
5Petitioner testified that he received $1,266 from Minnesota
Life Insurance.
6Petitioner produced a copy of a loan agreement for $65,000
dated Nov. 1, 1993. The loan agreement consists of a one-page,
unnotarized document between petitioner and one of his clients,
Sinh Hang. While the agreement does indicate a willingness on
the part of Mr. Hang to lend petitioner $65,000 in 1993, it does
not demonstrate that petitioner received $65,000 in loan
proceeds. Petitioner did not provide a deposit slip or bank
statement, nor did he provide a cash receipts journal entry
reflecting that the loan, if received, was included in gross
receipts.
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