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in those years to reduce the amount of the deposits that would be
deemed income. Significantly, respondent points out that his
bank deposits reconstruction represents only check deposits
because no cash was deposited into the deposit account for
Gene’s.
Petitioners attempt to convince us that some of the cash
that was used to cash checks came from petitioner’s parents, as
opposed to cash from the sale of groceries. Admittedly, by
intentionally not relying on the cash register tapes, petitioner
omitted cash sales of groceries from the income reported to
respondent. Respondent, by including all checks that were
deposited into deposit accounts, included some checks that were
exchanged by Gene’s customers for cash only or cash and
groceries. Respondent, however, by eliminating all of the
transfers to the operating account, gave petitioners the benefit
of the doubt by allowing all of petitioners’ expenditures,
including expenses of Gene’s, cash for check cashing, and also
personal expenses of petitioners and their family. Considering
respondent’s conservative approach, it is likely that
respondent’s reconstruction did not capture some portion of the
income derived from the cash sales of groceries. In connection
with respondent’s bank deposits analysis, however, some income
from cash sales may have been included in the cashed checks
deposited in the deposit account. Respondent’s eliminations from
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