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these adjustments until our discussion of the fraud penalty and
the period of limitations.
2. Mr. Coyle
Respondent determined that Mr. Coyle failed to report
commission income received from Regal of $21,130 in 1992 and
$18,816 in 1993. The commission income consisted of the income
which Regal received from sales of wheels and axles and which Mr.
Coyle diverted from Regal. Mr. Coyle reported $23,920 in 1992
and $26,340 in 1993 of “other” income (not “commission” income)
on his Federal income tax returns.3
In our discussion above, we have concluded that Regal
received gross receipts from sales of wheels and axles and that
the funds received were paid to Mr. Coyle. The discussion here
provides further support for our conclusion that Mr. Coyle failed
to report commission income as determined in the notice of
deficiency.
Respondent elicited testimony from four of Regal’s former
employees concerning their involvement with sales of wheels and
axles. All four provided credible testimony that Mr. Coyle was
the person who received the cash from sales of wheels and axles
or, if he was not available at that time, the cash would
ultimately be turned over to him. Mr. Coyle has admitted that
3 Regal paid its other salespeople a commission for each
mobile home sold.
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