- 10 - As a first step, respondent reviewed copies of third party checks that petitioner used to purchase cashier’s checks. During 1997 petitioner purchased in excess of $800,000 in cashier’s checks with cash, and negotiated third party business and personal checks. Petitioner testified that he purchased the cashier’s checks to protect his money in case of a bank failure. He also testified that one of his objectives in using third party checks to purchase cashier’s checks was to prevent the bank from reporting cash transactions exceeding $10,000 to the Internal Revenue Service. Significantly, petitioner failed to provide any documentation to show that the third party checks used to purchase cashier’s checks were included in business gross receipts. Finally, petitioner’s accountant testified that she had no knowledge of the existence of the cashier’s checks. Because petitioner presented no evidence to account for the third party checks, respondent designated checks from cigarette manufacturers, and not related to other types of income, as coupon and buy-down receipt checks. Checks totaling $531,605 fit into that category. In addition, petitioner’s accountant made a $400,746 accounting entry in petitioner’s October 1997 records with respect to checks received from cigarette manufacturers. Respondent accepted that entry as reflecting payments received from cigarette manufacturers. Because no activity was recordedPage: 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