- 6 - D. Respondent’s Reconstruction of Petitioner’s Income The examination began on April 23, 1997. Alex Malichiwski (Malichiwski), respondent’s revenue agent, examined petitioner’s 1993 and 1994 returns. He issued summonses to petitioner’s banks for petitioner’s records. Citibank and Chemical Bank gave Malichiwski copies of petitioner’s bank statements and checks for 1993, 1994, and 1995.1 Malichiwski reconstructed petitioner’s income for 1993 and 1994 because petitioner did not have records. He used a modified bank deposits method in which he assumed that deposits of less than $1,000 (hereinafter referred to as small deposits), totaling $12,363 in 1993 and $12,677 in 1994, were petitioner’s wages from the photo shop. He did not include the deposit from the reported gambling winnings in 1994 as income in the modified bank deposits method because petitioner had reported the $20,046 on her 1994 return. Malichiwski concluded that 10 of petitioner’s bank deposits of $1,000 or more in 1993 (totaling $25,500) were unreported income because petitioner did not establish to his satisfaction during the examination that those funds were not taxable income to her. He concluded that, of petitioner’s six bank deposits of $1,000 or more in 1994 (totaling 11,267.47), deposits of $4,000 1 The banks did not have copies of all of petitioner’s checks.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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