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The stipulation of facts relative to sentencing, filed June 18,
1996, (the stipulation relative to sentencing) states: “The
total federal income taxes evaded by * * * [petitioner] for the
year 1989 was approximately $16,000". The U.S. District Court
for the Eastern District of Missouri imposed a 9-month jail term
and ordered petitioner to pay an assessment of $50, a fine of
$1,000, and restitution to the Internal Revenue Service in the
amount of $16,000. Petitioner paid these amounts as required.
Respondent’s Examination and Determination
As part of the criminal investigation of petitioner,
respondent’s special agent searched county records and bank
records, and interviewed third parties. Respondent found that
petitioner did not have a bank account. Respondent used the net
worth method to reconstruct petitioner’s income. Respondent
determined that petitioner had received unreported income of
$40,237 and $67,708 for taxable years 1988 and 1989,
respectively, resulting in taxable income of $35,287 and $62,609
for taxable years 1988 and 1989, respectively.
The following is respondent’s computation of petitioner’s
increase in net worth plus living expenses for 1988 and 1989:
ASSETS 12/31/88 12/31/89
PROPERTIES
Carskadon 80 acre farm $45,000.00 $45,000.00
Schaller/603 Donaldson 12,480.00 12,480.00
Williamstown School –- 8,500.00
Dawg Gone Saloon –- 1,400.00
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Last modified: May 25, 2011