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Respondent determined that petitioner’s profits from his

consulting business should be increased by $24,016 for 1994,

$7,037 for 1995, and $13,094 for 1996, consisting of omitted

gross receipts and disallowed claimed business expenses.

In addition to compensation for his consulting services,

petitioner received reimbursement from his clients for expenses.

The reimbursements were not included in the compensation reported

on Forms 1099 issued by the clients but were deducted by

petitioner

on

the

consulting

business

Schedules

C.

Petitioner

did

not

keep

accurate

records

of

his

reimbursed

expenses.

The

invoices he submitted to the clients did not match deposits made

into

his

bank

accounts.

During

the

audit,

petitioner

identified

certain deposits as amounts he received from clients for services

and reimbursed expenses (the consulting business deposits).

In computing the gross receipts from petitioner’s consulting

business, respondent used the specific items method; i.e., the

consulting

business

deposits.

The

consulting

business

deposits

totaled $83,966 in 1994, $56,066 in 1995, and $63,651 in 1996.

At trial petitioner offered no evidence to establish that the

deposits were not amounts paid to him by his clients or were

nontaxable

amounts.

We

find

that

petitioner’s

gross

receipts

from the consulting business were as determined by respondent;

namely $83,966 in 1994, $56,066 in 1995, and $63,651 in 1996.

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