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Year Schedule C Net Profit1
1995 $204,761.53
1996 35,146.37
1997 116,049.14
1The Schedule C net profit that respondent determined in the
notice for each of the years 1995 and 1997 is equal to peti-
tioner’s gross receipts calculated in accordance with peti-
tioner’s billing invoices and/or purchase orders minus the cost
of sales that respondent accepted in the notice as substantiated
by petitioner. With respect to 1995, petitioner’s gross receipts
calculated in accordance with petitioner’s billing invoices
and/or purchase orders (i.e., $449,283.08) was larger than
petitioner’s gross receipts calculated under the bank deposits
method (i.e., $434,306.59). With respect to 1997, petitioner’s
gross receipts calculated in accordance with petitioner’s billing
invoices and/or purchase orders (i.e., $339,646.51) was smaller
than petitioner’s gross receipts calculated under the bank
deposits method (i.e., $339,908.45). The Schedule C net profit
that respondent determined in the notice for 1996 is equal to
petitioner’s gross receipts calculated under the bank deposits
method minus the cost of sales that respondent accepted in the
notice as substantiated by petitioner. With respect to 1996,
petitioner’s gross receipts calculated under the bank deposits
method (i.e., $310,029.75) was smaller than petitioner’s gross
receipts calculated in accordance with petitioner’s billing
invoices and/or purchase orders (i.e., $330,646.69). The record
does not disclose the reasons for the foregoing actions of
respondent.
Respondent further determined in the notice that petitioner was
liable for each of the years at issue for additions to tax under
sections 6651(a)(1) and 6654(a).
OPINION
Respondent concedes that section 7491 is applicable in the
instant case. With respect to section 7491(a), respondent
maintains that petitioner has not introduced credible evidence
under section 7491(a)(1) or complied with section 7491(a)(2) and
that therefore the burden of proof with respect to respondent’s
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Last modified: May 25, 2011