- 16 - Liquors and to Mr. Beck notices of deficiency for the taxable years 1991, 1992, and 1993. Using the bank deposits and cash expenditures method, respondent determined that Beck's Liquors underpaid its tax by $44,274.16 in 1991, $23,047.49 in 1992, and $37,064.66 in 1993. Respondent asserts that Beck's Liquors underreported its income by the following amounts: 1991 1992 1993 Unreported gross receipts 74,453 115,133 84,782 Cost of goods sold 3,014 (39,004) 11,474 Disallowed expenses 46,060 26,476 30,204 Total unreported income 123,527 102,605 126,460 Respondent's adjustments to the gross receipts of Beck's Liquors were computed as follows: 1991 1992 1993 State Bank deposits 1,574,706 1,475,700 1,554,350 Cash payments 85,164 101,305 75,487 Nonincome items (404,324) (335,616) (391,143) Total gross receipts 1,255,546 1,241,389 1,238,694 Reported on return 1,181,093 1,126,256 1,153,912 Unreported gross receipts 74,453 115,133 84,782 The cash payments were identified as follows: Cash payments 1991 1992 1993 Cash expenses--till 138 3,632 1,709 Wage--till 14,118 18,002 2,382 Gambling losses 20,600 15,700 –- Insurance proceeds 6,535 –- –- State Bank CD 27,500 –- –- Norwest Bank 2,273 2,316 4,026 Gate City S&L 9,000 –- –- Loan payments 5,000 35,000 44,000Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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