- 5 -
Finance charges 727 -0- 982
Other 530 -0- -0-
Interest expense 529 -0- 726
112,500 127,117 136,951
Profit (loss) (9,614) 17,109 954
The “Salary expense” represented payments which Jasmak made to
petitioner for his services. Petitioner now acknowledges that
the deduction of these payments was improper.
In 2000, the Commissioner began auditing petitioner’s 1997
through 1999 taxable years. As a result of this audit, the
Commissioner increased (decreased) petitioner’s reported taxable
income as follows and reflected these adjustments in the subject
notice of deficiency mailed to petitioner on February 21, 2002:
1997 1998 1999
Self-employment income:
Unreported gross receipts $16,338 $26,631 $24,988
Self-employment expenses:
Advertising 5,952 -0- 2,610
Commissions 19,261 23,397 24,105
Depreciation 1,315 4,801 4,848
Insurance 3,428 4,785 6,097
Legal 2,410 8,240 7,174
Purchases 52,174 127,641 100,764
Returns and allowances -0- 6,760 -0-
Salary 11,000 20,200 22,000
Sales tax 3,118 2,985 3,226
Telephone 4,439 5,307 5,770
Transportation 1,767 1,040 1,530
Other items of income:
NOL carryover -0- 37,181 -0-
AGI adjustments:
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Last modified: May 25, 2011