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Respondent determined that petitioners’ unreported income for
1992 using the bank deposits and cash expenditures method was as
follows:
Bank Deposit and Expenditures Reconstruction for 1992
Bank Deposit Summary
Acct. no. 162-14996-– $1,298,435
bus. deposit acct.
Acct. no. 161-17636-– 582,200
bus. operating acct.
Acct. no. 166-67322-– 35,430
personal checking acct.
Total gross bank deposits 1,916,065
Add
Personal cash expenditures 2,700
Business Cash Expenditures 85,671
Subtotal 2,004,436
Subtract
Checks written to cash
Deposited into operating account $582,200
Amount of checks not deposited 711,400
Subtotal 1,293,600
($1,293,600)
Nontaxable deposits (40,998)
Business gross receipts 669,838
Per audit $669,838
Per return 508,049
Unreported income 161,789
During November 1994, respondent began a criminal
investigation of petitioner, and on November 25, 1996, petitioner
waived indictment and pleaded guilty to criminal tax evasion
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