- 8 - payments for 2000 and offered no evidence at trial to indicate any part of the $9,009,882 was nontaxable income. Respondent conceded that petitioner properly reported his Schedule C gross receipts of $4,196,750 in 2001. However, respondent allowed petitioner only $57,931 of the $4,238,057 he reported as Schedule C costs of goods sold and deductions in 2001. Using the ratio of the allowed amount to income for 2001 (1.38 percent),8 respondent computed allowable business deductions for petitioner’s 1999 and 2000 (as conceded) tax years of $50,388 and $124,336, respectively.9 The notice of deficiency was issued on July 29, 2005. Petitioner timely filed his petition on October 25, 2005. OPINION A. Procedural Rules Petitioner contends his due process rights were violated when respondent failed to provide him or his representative a notice of bypass for the years at issue pursuant to section 601.506(b)(1), Statement of Procedural Rules, and a 30-day letter stating the examiner’s determinations pursuant to section 601.105(d)(1), Statement of Procedural Rules. As a result, 8 $57,931 (2001 allowable Schedule C items)/$4,196,750 (2001 Schedule C gross business receipts) = 0.0138 = 1.38 percent. 9 $3,651,293 (1999 Schedule C gross business receipts) x 0.0138 = $50,388; and $9,009,882 (2000 Schedule C gross business receipts) x 0.0138 = $124,336.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007