Don R. Hetter

01-24

The Taxpayer operated a construction company as a sole proprietorship. The Taxpayer had previously been audited and assessed gross receipts tax for underreported receipts of the construction company. The Department then used the underreported gross receipts to increase the Taxpayer’s gross receipts as reported on his federal Schedule C, recalculated the Taxpayer’s federal adjusted gross income and issued assessments for personal income tax. The Department’s original gross receipts tax assessment was based upon the Taxpayer’s bank deposits because the Taxpayer did not maintain books of account for his business. As a result of the protest, the Taxpayer was able to demonstrate that some of the bank deposits should not be considered gross receipts, and that some of the bank deposits had been reported elsewhere on his federal return as income from capital gains. Taxpayer’s protest was granted in part and denied in part.