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prepared a schedule dated January 7, 1997 (Mr. Oliveras’ summary
of MZ Trading’s deposits during 1993). Mr. Oliveras’ summary of
MZ Trading’s deposits during 1993 set forth, inter alia, Mr.
Oliveras’ conclusions with respect to certain information regard-
ing each of the deposits that was made into MZ Trading’s accounts
during 1993, i.e., the date, the amount, and the payor of each
such deposit. Mr. Oliveras’ summary of MZ Trading’s deposits
during 1993 showed total deposits during that year into MZ
Trading’s accounts of $544,934 and “Total Taxable” deposits of
$485,855. That summary also stated in pertinent part:
The T/P did not provide an accurate reconciliation of
the receipts received by the partnership [MZ Trading]
during the 9312 period.
The bank deposit analysis reflects less deposits than
the gross receipts reported on the return [MZ Trading’s
1993 Form 1065]. This is an indication of receipts
being shifted to other accounts or kept on hand by the
T/P. Based on the bank deposit analysis, gross re-
ceipts are accepted as reported per IRC Section 61
provisions.
By letter dated March 3, 1997, respondent issued an inade-
quate records notice to petitioner and Ms. Brodsky. That letter
stated in pertinent part:
Our review of your records shows they do not
adequately verify your Federal tax liability * * *.
You are required by law to keep permanent records
and supporting documents * * *. These records may
consist of documents such as invoices, bills, tapes,
and receipts, or a timely kept account book, diary or
statement of expenses and supporting receipts, paid
bills, or cancelled checks. These must be sufficiently
detailed and arranged so that your liability can be
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