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Petitioner’s Federal Income Tax Returns
Pursuant to the terms of the plea agreement, petitioner
agreed to file a “true, complete and correct” Federal income tax
return for each of the subject years. On August 19, 1996,
petitioner filed these Federal income tax returns. Attached to
each return is a Schedule C, Profit or Loss From Business (Sole
Proprietorship) (Schedule C), showing, among other things, gross
income from the dental practice and wage expense deductions in
the following amounts:
Year Gross Income Wage Expenses
1990 $77,524 $21,862
1991 103,826 28,864
1992 113,651 29,323
1993 99,809 26,849
1994 100,640 27,575
Petitioner maintained no books or records of his income and
expenses. He does not know how he arrived at either the gross
receipts or wage expense deductions shown on the Schedules C.
Respondent’s Determinations
In the notice of deficiency, respondent determined that
petitioner’s dental practice gross income and allowable wage
expense deductions were as follows:
Year Gross Income Wage Expense
1990 $117,342 $11,036
1991 132,300 14,214
1992 174,072 29,524
1993 150,000 24,332
1994 190,000 20,002
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