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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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Last modified: May 25, 2011