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consistent with the bank deposits analyses for those years, and,
in addition, conceded $11,862 of the revised proposed adjustment
for 1989. During the trial, respondent conceded $8,786 of the
revised proposed adjustment for 1987.
As a result of respondent’s bank deposits analyses and
respondent’s concessions, respondent’s proposed adjustments for
unreported Schedule C income that remain at issue are as follows:
Year Proposed adjustment
1987 $36,981
1989 35,370
In preparing the bank deposits analysis for 1987, respondent
did not obtain or review all of the relevant bank records with
respect to petitioner’s accounts and did not adequately adjust
the analysis for nontaxable items. Most significantly,
respondent did not analyze retained copies of petitioner’s
deposit slips and bank statements, did not obtain missing bank
statements or copies of deposited items from the financial
institutions with which petitioner maintained her bank accounts,
and did not adjust the deposits analysis for all of the income
sources reported on petitioner’s 1987 return.
In preparing the bank deposits analysis for 1989, respondent
attached a list of deposits made to one of the two accounts
included in the analysis, on which some but not all of the
deposit sources were listed. The deposits list apparently was
prepared from retained copies of deposit tickets. Respondent did
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