- 7 - Item 1990 1991 1992 1993 1994 Gross receipts or sales $20,100 $81,640 $24,150 $26,210 $47,934 Returns & allowances --- --- --- 2,110 --- Net sales --- --- --- 45,824 --- Cost of goods sold --- --- --- 29,151 66,204 Gross profit --- --- --- 16,673 15,436 Total expenses 19,642 24,818 24,970 30,016 15,436 Net profit (loss) 458 (668) 1,240 -0- (13,343) The Forms 1040 Mr. Strong filed reflect a $65 tax liability based on self-employment tax in 1990 and a $175 self-employment tax liability in 1992. Mr. Strong reported no other tax on the Forms 1040 for 1990-94. Mr. Strong’s Initial Contacts and Discussions With A Revenue Officer In late 1991, Mr. Strong was contacted by an Internal Revenue Service (IRS) revenue officer. The purpose of this contact was to inquire regarding Mr. Strong’s unpaid income tax liabilities for 1987 and 1988 and his unfiled income tax returns for 1989 and 1990. Mr. Strong refused to provide the revenue officer with any personal or financial information, but he told the revenue officer that he expected his tax liabilities for 1989 and 1990 to be at least $50,000. In a later conversation, Mr.Page: 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