Robert C. Henry II - Page 7

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          above.  Petitioner agreed to respondent's determination of                  
          unreported gross receipts but contended at trial that the bank              
          deposits method utilized by respondent failed to include                    
          adjustments for the following:                                              
               (1) $325 paid to the funeral home during 1995 that                     
          represented reimbursement of amounts paid by the funeral home to            
          a cemetery for the burial of a former employee of the funeral               
          home during 1993;                                                           
               (2) Certain deposits made to the funeral home's bank account           
          during 1995 that represented payments by friends of petitioner              
          who, along with petitioner, went on a vacation cruise; and                  
               (3) Certain intra-account transfers of approximately $40,000           
          between the checking and savings accounts of the funeral home               
          during 1996 that were not adjusted by respondent (and thus were             
          counted twice).                                                             
               On this record, the Court agrees with petitioner that the              
          unreported gross receipts for 1995 should be reduced by $325.               
          The Court is satisfied from petitioner's testimony that the $325            
          represented reimbursement for an amount paid by petitioner during           
          1993 for which petitioner did not claim a deduction for Federal             
          income tax purposes.  At trial, respondent conceded, in                     
          connection with petitioner's second argument above, that                    
          petitioner was entitled to a reduction of $3,080 in the                     
          determined gross receipts for 1995.  As to petitioner's third               





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