- 8 -
income from New Dimensions in 1999. Petitioner testified that
he just assumed that the amounts reported on the Form W-2 were
correct and said that he “didn’t really scrutinize [it] more
than taking a glance at it and giving it to my accountant.” We
think that a reasonable and prudent taxpayer in these
circumstances would have noticed the discrepancy between the
amount of income he earned and the amount reported on the Form
W-2, and at least would have contacted New Dimensions to verify
the accuracy of the company’s information return. The
difference between the amount on the Form W-2 and petitioner’s
actual receipts during 1999 was so great, and such a high
proportion of his total income, that we consider his explanation
entirely unbelievable. Consequently, it is our view that,
without a satisfactory reason, petitioner reported on his
Federal income tax return for 1999 far less income than he
received during the year.
At trial, petitioner acknowledged receiving compensation
throughout the disputed pay period. However, he claimed that
the amount he actually earned and received was far less than
$12,396.
Respondent produced copies of 15 relevant paychecks from
the disputed pay period in support of the Form 1099, but
respondent acknowledges that at least three checks are missing
from the record. In sum, the 15 paychecks total $11,336.60, but
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011