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Oertel treated all these unidentified deposits as nontaxable to
petitioner. Agent Oertel also cross-checked against PAC’s
corporate books all items treated as taxable to petitioner.
Agent Oertel treated as nontaxable any items deposited to
petitioner’s account that had been included in PAC’s income.5
Using this very conservative approach, Agent Oertel
determined that petitioner deposited to his bank account during
the years in issue $122,599 in funds6 from the sale of computer
equipment, none of which was recognized on petitioner’s or PAC’s
income tax returns.
In addition to the taxable income determined from responses
to Agent Bricker’s letters, respondent treated a total of
$23,1297 deposited into petitioner’s bank account as taxable
because Agent Oertel could tell from references on the checks
that the payments were on account of computer equipment
purchases. Respondent introduced into evidence copies of the
documents showing the references upon which Agent Oertel relied.
As determined by respondent, the references specifically relate
5Respondent did not analyze whether amounts included in
PAC’s income that had been paid to petitioner would be taxable to
petitioner as, for example, constructive dividends.
6This consists of $48,956.84 in 1988, $30,586.19 in 1989,
and $43,055.89 in 1990.
7This consists of $9,841.60 in 1988, $5,505.50 in 1989, and
$7,782.00 in 1990.
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Last modified: May 25, 2011