Bob J. & Ernestene Sams, et al. - Page 5




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          A Federal tax return prepared for 1995 for Carter Bonding                   
          reflected gross receipts of $64,939.  That return, however, was             
          not filed by Carter Bonding.                                                
               Respondent determined that Carter Bonding received and                 
          failed to report income in the amounts of $64,955 in 1994 and               
          $164,885 in 1995.  The amount for 1994 represents the difference            
          between the total premiums reported to the Oklahoma Insurance               
          Department and the bank deposits used in preparing Carter                   
          Bonding’s Federal income tax return for 1994.  The amount for               
          1995 represents the total premiums reported to the Oklahoma                 
          Insurance Department because Carter Bonding did not file an                 
          income tax return for 1995.  Respondent determined that the                 
          unreported income constituted constructive dividends to the                 
          Samses and to Sullivan.                                                     
               Respondent also determined that the Samses and Sullivan had            
          unreported income equal to deposits in their personal bank                  
          accounts.  Respondent has now conceded that the amounts of                  
          constructive dividends to the Samses and to Sullivan should be              
          only the amounts deposited in their personal bank accounts and              
          should not include the unreported income to Carter Bonding.  The            
          Samses and Sullivan have not disputed that the unexplained                  
          deposits in their personal bank accounts were constructive                  
          dividends from Carter Bonding.  Other adjustments in the                    
          statutory notices, such as unreported rental income of Sullivan,            






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