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tax year 1994, and this tax year was also included as part of the
examination.
During the examination, respondent obtained petitioner’s
accounts receivable book (redbook). Respondent computed gross
receipts and proposed adjustments to income relying on the
redbook. Petitioner sent respondent a letter on at least one
occasion to dispute the method by which respondent interpreted
the redbook in proposing adjustments to gross receipts.2 Each
time petitioner or his representative identified errors,
respondent considered the information and modified the
adjustments to income.
Respondent issued a notice of deficiency to petitioner on
January 30, 1998. Respondent determined deficiencies in
petitioner’s Federal income taxes, penalties, and additions to
tax as follows:
Additions to Tax Penalties
Year Deficiency Sec. 6651(a)(1) Sec. 6654 Sec. 6662(a)
1991 $3,272 $790 --- $654
1992 3,455 --- --- 691
1993 58,640 2,932 --- 11,728
1994 150,431 37,608 $7,750 ---
2 Petitioner did not attach to his motion for costs a
copy of the correspondence, but the notice of deficiency makes
reference to unspecified allegations of error by petitioner.
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