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deficiencies were based in large part upon respondent’s
reconstruction of petitioner’s income using the bank deposits
method. Respondent determined that petitioner received
unreported income from crop sales (which he deposited into his
checking account at Farmer’s State Bank). Specifically,
respondent determined that petitioner’s tax liability for 1991-94
should be increased as follows:
Adjustment 1991 1992 1993 1994
NOL carryover $16,853 $15,653 $5,970 --
Patronage dividend -- -- 162 --
Schedule F
Rent expense -- 10,000 -- $6,912
Sales of grain 75,800 42,714 26,127 68,713
Seed expense -- 10,000 -- --
Taxes paid -- -- -- 2,241
Self employment (3,648) (3,632) (1,380) (4,342)
Total 89,005 74,735 30,879 73,524
Increase in tax 22,527 21,154 5,096 30,233
On November 16, 2000, petitioner filed a petition with this
Court, disputing the full amount of the deficiencies and
penalties. Petitioner now concedes that, on his 1991-94 returns,
he omitted grain sale receipts of $75,799 in 1991, $39,900 in
1992, $24,481 in 1993, and $68,713 in 1994. Respondent concedes
all other adjustments to Schedule F. Respondent also concedes
the net operating losses for 1991-93, as well as the patronage
dividend in 1993.
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