- 8 - H. Respondent’s Audit and Determination Respondent’s tax auditor, Shirley Todd (Todd), audited petitioner’s 1994 and 1995 income tax returns. Petitioner gave Todd his Colonial Bank statements for January to November 1995. He did not produce any other bank statements. Petitioner did not give complete records of his income and deductions for 1994 and 1995 to Todd. Petitioner told Todd that he employed only one individual in his tax preparation activity and that the individual was an independent contractor. Petitioner deducted as rent on his 1994 and 1995 Schedules C mortgage payments he made for the Lower Wetumpka Road house. Petitioner told Todd that he received no gifts or inheritances in 1994 and 1995. He also said that he calculated gross receipts for his tax return activity based on deposits into his Colonial Bank account. Respondent determined petitioner’s gross receipts from the tax preparation business from deposits into petitioner’s Colonial Bank account. Respondent averaged petitioner’s deposits for September, October, and November 1995 to estimate an amount for December because petitioner did not give respondent his December 1995 bank statement.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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