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Revenue Agent Oertel compared the data obtained by Agent
Bricker against petitioner’s and PAC’s bank records to determine
whether the sales had been reported as income on either
petitioner’s or PAC’s Federal income tax returns. Agent Oertel
prepared a detailed line-item analysis of petitioner’s bank
records. Respondent’s analysis of the evidence left no doubt
that petitioner had received substantial amounts of income that
were not reported on his income tax returns. Petitioner offered
no credible explanation for the omitted income.
Respondent took a very conservative approach to the
determination of petitioner’s omitted income. Unless Agent
Oertel could tell from specific information contained on the
check (such as a reference to the purchase of computer products
written on the check itself), Agent Oertel treated all the
deposits for which Agent Bricker did not receive a response
(totaling $769,6123) as nontaxable to petitioner. In addition,
petitioner had $695,9104 in deposits to his checking account that
neither Agent Bricker nor Agent Oertel could identify, either
because the bank did not provide sufficient information, because
the information provided was not legible, or because the check
did not indicate the name and address of the drawer. Agent
3This consists of $459,677.02 for 1988, $150,338.50 for
1989, and $159,596.09 for 1990.
4This consists of $352,975.57 in 1988, $137,509.13 in 1989,
and $205,425.77 for 1990.
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Last modified: May 25, 2011