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Payment was typically received between 30 days and 180 days from
the date of invoice.
During the year in issue, petitioner maintained a personal
checking account at Nations Bank/Bank of America2 for both
personal and business deposits and expenditures. In 1996,
petitioner made total deposits into his personal checking account
of $46,382.89.
In 1996, petitioner owned a 1994 Lexus ES-300 (Lexus). On
Form 4562, Depreciation and Amortization, attached to Schedule C,
petitioner claimed that the Lexus was used 85 percent for
business use and 15 percent for personal use. Petitioner also
owned a Toyota Camry during the year in issue.
Petitioner timely filed his 1996 Federal income tax return.
During the examination of petitioner’s 1996 income tax return,
petitioner submitted to respondent’s agent a revised Form 1040,
U.S. Individual Income Tax Return, which was never filed,3
including a new 1996 Schedule A, Itemized Deductions. This
return reflected itemized deductions on Schedule A in lieu of the
standard deduction on petitioner’s original return.
In a notice of deficiency, respondent determined that
2 Nations Bank acquired Bank of America in 1996, and the
combined bank became Bank of America.
3 It is unclear from the record whether petitioner prepared an
amended 1996 Federal income tax return, Form 1040X, Amended U.S.
Individual Income Tax Return.
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Last modified: May 25, 2011