- 11 - December 3, 1996; however, she did not produce a bank statement from the account for the period December 4 through 31, 1996. Because petitioner did not produce all of the requested records, respondent reconstructed petitioner’s income by performing a bank deposit analysis of her account. Respondent determined in the notice of deficiency that petitioner had unexplained deposits in the account and, therefore, unreported gross income of $35,318. Subsequent to the issuance of the notice of deficiency respondent reduced this amount to $25,578 calculated as follows: Total deposits into account $99,381 Returned checks (3,375) Deposits from home equity line of credit (13,000) Income reported on return (57,428) Total unexplained deposits 25,578 In addition to the use of the bank deposit methodology, respondent determined that petitioner received $12,589.55 in commission income and $1,800 in teaching income from O’Brien, based upon Forms 1099-MISC issued to Sams, Inc. and filed with respondent. Petitioner reported the teaching income of $1,800 but only $10,122 of the commission income in 1996. Petitioner asserts that the deposits into the account can be explained from the following sources: Returned checks $3,375 Home equity line of credit 14,700 1099-MISC O’Brien commissions 10,122 1099-MISC O’Brien teaching 1,800 Mack/Middleton interest 22,140 Mack/Middleton reimbursement 3,881Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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