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Year Adjusted Gross Income or Loss
1985 $122,352
1986 $180,687
1987 ($332,696)
The above adjusted gross income and loss figures reported on
petitioners’ joint Federal income tax returns for 1985, 1986, and
1987 did not reflect any of the proceeds of petitioner’s illegal
drug transactions.
Petitioners did not provide any books and records or
otherwise disclose to their tax return preparer any information
relating to petitioner’s drug transactions, and petitioners
failed to provide to their tax return preparer and to respondent
any books and records with respect to the illegal drug
transactions in which petitioner participated.
Respondent’s agent investigated petitioner for failing to
report income from illegal drug transactions in 1985, 1986, and
1987. Respondent’s agent and an agent of the North Carolina
State Bureau of Investigation interviewed Posey and Cunningham
regarding their participation with petitioner in the illegal drug
transactions during the years in issue.
On the basis of his investigation and his interviews with
Posey and Cunningham, respondent’s agent determined the amounts
petitioner received on the sales of marijuana in which petitioner
and Posey and/or Cunningham were involved.
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Last modified: May 25, 2011