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On brief, petitioner contends that she is liable for income
tax on $4,333 (one-third of $13,000) from the photo shop in 1994
because she worked for and had earnings from the photo shop for
only 4 months in 1994. We disagree. Petitioner testified that
she had problems with pregnancies in 1991 and 1992, and that she
worked only the first 6 months of 1994 because she was pregnant
with twins. Petitioner later testified that she worked
throughout 1994 but only 6 months in 1995. Petitioner made small
deposits throughout 1994 as she had throughout 1993. These small
deposits totaled $12,363 in 1993 and $12,677 in 1994. This
suggests that she worked throughout 1993 and 1994. We conclude
that petitioner earned $13,000 working for the photo shop in 1993
and in 1994, and that she is liable for income tax on those
amounts.
B. Whether Petitioner Failed To Report Income of $25,500 for
1993 and $5,486 for 1994
We must decide whether, as respondent contends, petitioner
failed to report income (in addition to her $13,000 salary from
the photo shop) of $25,5003 for 1993 and $5,486 for 1994.
Respondent reconstructed petitioner's income using a modified
bank deposits method in which respondent counted deposits of
3 Petitioner contends that she did not receive a lump-sum
payment of $25,500. Respondent does not contend that petitioner
received $25,500 in a lump sum. Rather, respondent contends that
petitioner received and deposited that amount in her bank
accounts throughout 1993, used it for personal expenses, and did
not report it on her income tax return.
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