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2. Corporate Distributions
The Mansours received and deposited into their personal bank
account at SunTrust checks from Mansour Enterprises, net of
repayments, totaling $32,675. The IRS determined that Mansour
Enterprises was an S corporation during 1999 and that the
Mansours had failed to establish their basis in their Mansour
Enterprises stock. Accordingly, because the Mansours reported
income of $5,700 from the operations of Mansour Enterprises on
their 1999 return, the IRS determined that the Mansours should
have included an additional $26,975 in income as a result of
these distributions.
3. Other Income
The Mansours received and deposited into their personal bank
account at SunTrust unexplained amounts of cash and checks from
sources other than their business entities or those reported on
their income tax return totaling $112,407. The IRS determined
that the Mansours should have reported this amount on their 1999
return as income from self-employment.
Examination of the Gownis’ Income Tax Returns for 1998 and 1999
The examination of the Gownis’ income tax returns for 1998
and 1999 began in October 2000 as a result of the identification
of a common issue concerning the loss claimed in 1998 with
respect to Tomson. The Gownis executed a power of attorney in
favor of Bradshaw with respect to their income tax returns for
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