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Respondent determined a deficiency in petitioners’ Federal
income tax in the amount of $10,167 and an accuracy-related
penalty under section 6662(a) of $1,728.40 for taxable year 1995.
After petitioners’ concession,1 the issues for decision are: (1)
Whether petitioners received unreported income of $22,082.25 for
1995, as suggested by unexplained bank deposits made by them
during that year; and (2) whether petitioners are liable for an
accuracy-related penalty under section 6662(a) for 1995.
Background
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time of filing
their petition, petitioners resided in Green Lane, Pennsylvania.
During the year in issue, petitioner Jimie R. Overby
(hereinafter petitioner) operated a general contracting business,
while petitioner Sandra Herlitschek Overby operated a consulting
business. Petitioners deposited the gross receipts from these
two businesses into bank accounts opened at Quakertown National
Bank. The bank accounts consisted of a checking account and a
savings account.
During the year in issue, petitioners made bank deposits
totaling $103,072.44. Of this total amount, $50,657 is
1 Petitioners concede that they are not entitled to the
claimed Schedule C, Profit or Loss From Business, deductions in
the amount of $10,811 for the 1995 taxable year.
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