- 6 -
reported.” Rifkin v. Commissioner, T.C. Memo. 1998-180, affd.
without published opinion 225 F.3d 663 (9th Cir. 2000). The
implication is that the excess of expenditures over reported
income represents unreported income. Id.
On the income side of the “T” account, TCO Martin determined
that petitioner had total cash sources of $34,473, consisting of:
(1) Reported wages of $3,000, (2) reported Schedule C gross
receipts of $20,305, (3) gifts from her son of $6,000, and (4)
Social Security benefits of $5,168 for MA. On the expenses side
of the “T” account, TCO Martin determined that petitioner had
total cash expenditures of $52,344, consisting of: (1)
State/Federal withholdings of $230, (2) tax payments for prior
years of $700, (3) Schedule A expenses of $427, (4) Schedule C
expenses of $11,978, (5) personal living expenses of $10,826, and
(6) net gambling losses of $28,183 in 2002. Therefore,
petitioner’s expenditures exceeded her known income by $17,871.
Since petitioner failed to show that she had other sources of
income, TCO Martin concluded that the excess expenditure of
$17,871 represented unreported gross receipts from her flea
market sales.
At trial, the focus of the inquiry with regard to the cash T
analysis was on petitioner’s gambling losses. According to the
annual activity report from Jackson Rancheria, which is
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011