Wayne Payne and Dorene J. Payne - Page 25

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          practice of concealing income by providing only bank statements             
          and records to their tax return preparer and converting checks              
          into cash at the Money Exchange.  Petitioners did not employ this           
          practice with respect to the unreported deposits; instead, they             
          provided their bank information to their tax return preparers.              
          Therefore, the fraud penalty does not apply to the deficiency               
          amounts resulting from petitioners’ unreported bank deposit                 
          income in 1993 and 1995.  Petitioners have not shown that any               
          other portion of the deficiencies should not be subject to the              
          fraud penalty.  Therefore, the remainder of the deficiencies for            
          1993, 1994, and 1995 is subject to the fraud penalty.                       
               To reflect the foregoing, concessions of the parties, and to           
          give effect to the stipulations by the parties,                             

                                                  Respondent’s Motion for             
                                             Leave to Amend the Answer to             
                                             Conform the Pleadings to the             
                                             Proof is denied as moot, and             
                                             Decision will be entered                 
                                             under Rule 155.                          

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Last modified: May 25, 2011