Yu-Yang Wu - Page 10




                                       - 10 -                                         
               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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