Ghadiri v. Commissioner
| Decision Date | 27 November 1996 |
| Docket Number | Docket No. 14817-95. |
| Citation | 72 T.C.M. 1383 |
| Parties | Khosrow Ghadiri and Turan Mirhady Ghadiri v. Commissioner. |
| Court | U.S. Tax Court |
Jerold A. Reiton and Alan James Pinner, San Jose, Claif., for the petitioners. Andrew P. Crousore, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
Khosrow Ghadiri (Mr. Ghadiri) and Turan Mirhady Ghadiri (Mrs. Ghadiri) petitioned the Court to redetermine respondent's determination of the following Federal income tax deficiencies and additions thereto:
Additions to Tax
--------------------------------------------------------------------------
Year Deficiency Sec. 6651(a)(1) Sec. 6653(a)(1)(A) Sec. 6653(a)(1) Sec. 6653(a)(1)(B)
1986 ........... $227,086 $56,771 $11,354 -- 50% of the
interest due
on $227,086
1987 ........... 143,674 35,919 7,184 -- 50% of the
interest due
on $143,674
1988 ........... 33,251 8,313 -- $1,663 --
Respondent later adjusted these deficiencies to the amounts stated below. Respondent conceded that the additions to tax should be adjusted to reflect the revised deficiencies.
Additions to Tax
--------------------------------------------------------------------------
Year Deficiency Sec. 6651(a)(1) Sec. 6653(a)(1)(A) Sec. 6653(a)(1) Sec. 6653(a)(1)(B)
1986 ......... $129,159 $56,771 $11,354 -- 50% of the
interest due
on $268,589
1987 ......... 75,428 35,919 7,184 -- 50% of the
interest due
on $260,736
1988 ......... 41,969 8,313 -- $1,663 --
Following concessions, we must decide:
1. Whether, and to what extent, amounts that petitioners deposited into their print shop bank accounts are includable in their 1986, 1987 and 1988 gross income. We hold petitioners must include $449,306, $401,226, and $332,147 in gross income for their 1986, 1987, and 1988 taxable years, respectively.
2. Whether respondent is barred from assessing tax for petitioners' 1988 taxable year. We hold she is not.
3. Whether petitioners are liable for additions to tax under section 6651(a)(1) for their 1986, 1987, and 1988 taxable years. We hold they are.
4. Whether petitioners are liable for additions to tax under section 6653(a)(1)(A) and (B) for their 1986 and 1987 taxable years, and under section 6653(a)(1) for their 1988 taxable year. We hold they are.
Unless otherwise indicated, section references are to the Internal Revenue Code applicable to the years in issue. Rule references are to the Tax Court Rules of Practice and Procedure. Dollar amounts are rounded to the nearest dollar.
Some of the facts have been stipulated and are so found. The stipulations and the exhibits attached thereto are incorporated herein by this reference. Petitioners resided in San Jose, California, when they filed their petition.
During petitioners' 1986, 1987, and 1988 taxable years, they owned and operated print shops known as "Maple Press" and "Acacia Press". During petitioners' 1988 taxable year, they also owned and operated a print shop known as "Print Technology". Petitioners did not keep books or records for any of these print shops. During 1986 and 1987, petitioners' only sources of income were Maple Press, Acacia Press, and Mr. Ghadiri's teaching position, which paid him less than $5,000 per year. During 1988, petitioners' only sources of income were Maple Press, Acacia Press, Print Technology, and Mr. Ghadiri's teaching position, which paid him less than $5,000.
Petitioners reported Mr. Ghadiri's teaching income on their tax returns for the respective years. Petitioners hired Peter A. Balbiani, a certified public accountant, to file their Federal income tax returns for 1986, 1987, and 1988. For 1986, 1987, and 1988, the record contains no copies of deposit slips for the bank accounts into which the gross receipts of petitioners' print shops were deposited.
During 1986, petitioners made the following deposits and reported on their tax return the following gross receipts from Maple Press and Acacia Press:
Gross Receipts
Entity Account Name Total Deposits Reported
Maple Press. ............................ Bank of America $512,037 $125,199
Acacia Press ............................ Bank of America 94,124 -0-
________ ________
Total ................................................... 606,161 125,199
In 1986, Maple Press received checks totaling $7,765 which were not honored on presentment due to insufficient funds (ISF checks) and had miscellaneous bank debits totaling $15,299. Acacia Press received ISF checks totaling $1,282. The following transfers occurred during 1986:
Entity Receiving Transfer
----------------------------------
Transfer From Maple Press Acacia Press Total
Mrs. Ghadiri .................................... $1,730 -0- $1,730
Maple Press ..................................... -0- $2,410 2,410
Acacia Press .................................... 3,170 -0- 3,170
______ ______ ______
4,900 2,410 7,310
During 1987, petitioners made the following deposits and reported on their tax return the following gross receipts from Maple Press and Acacia Press:
Gross Receipts
Entity Account Name Total Deposits Reported
Maple Press .............................. Bank of America $277,574 $126,267
Bank of the West 169,241 -0-
Acacia Press ............................. Bank of America 360,236 -0-
Bank of the West 16,622 -0-
________ ________
823,673 126,267
In 1987, Maple Press received ISF checks totaling $2,619 and had miscellaneous bank debits totaling $18,090. Acacia Press received ISF checks totaling $35,897. The following transfers occurred during 1987:
Entity Receiving Transfer
-------------------------------------
Transfer From Maple Press Acacia Press Total
Mrs. Ghadiri .................................. $156,784 $65,455 $222,239
Maple Press ................................... -0- 6,066 6,066
Acacia Press .................................. 11,290 -0- 11,290
_________ ________ ________
Total ....................................... 168,074 71,521 239,595
For their 1987 taxable year, petitioners received but did not report interest income of $21.
During 1988, petitioners made the following deposits and reported on their tax return the following gross receipts from Maple Press, Acacia Press, and Print Technology:
Gross Receipts
Entity Account Name Total Deposits Reported
Maple Press .............................. Bank of the West $304,087 $150,044
Acacia Press ............................. Bank of the West 176,803 -0-
Print Technology ......................... Wells Fargo Bank 48,368 -0-
________ ________
Total ..................................................... 529,258 150,044
In 1988, Maple Press received ISF checks totaling $6,533. Acacia Press received ISF checks totaling $7,886. The following transfers occurred during 1988:
Entity Receiving Transfer
---------------------------------------
Print
Transfer From Maple Press Acacia Press Technology Total
Mrs. Ghadiri ............................ $ 360 -0- $1,600 $ 1,960
Maple Press ............................. -0- $10,922 -0- 10,922
Print
Technology .............................. 13,725 6,050 -0- 19,775
_______ _______ ________ _______
Total ................................. 14,085 16,972 1,600 32,657
For their 1988 taxable year, petitioners received but did not...
To continue reading
Request your trial