Eric Maurice Pinckney

United States Tax Court T.C. Memo. 2026-113 ERIC MAURICE PINCKNEY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent __________ Docket No. 5050-19. Filed November 4, 2026. __________ Eric Maurice Pinckney, pro se. Timothy R. Prosky, Nicholas A. Gamotis, Olivia H. Rembach, and Ashley M. Bender, for respondent. TABLE OF CONTENTS MEMORANDUM FINDINGS OF FACT AND OPINION ..................... 6 FINDINGS OF FACT .............................................................................. 8 Pinckney owned and operated Daitech Tax Services, LLC. ................... 8 One of Pinckney’s accounts was the Daitech Account. ......................... 10 On May 12, 2009, Pinckney filed his 2008 return, which included Schedule Cs, Profit and Loss From Business, for both Daitech and Pinckney Business Consulting. .............................................. 11 On April 6, 2010, Pinckney filed his 2009 return, which included a Schedule C for Daitech but not Pinckney Business Consulting. ...................................................................................... 14 The IRS began a civil examination of Pinckney’s 2008 and 2009 returns, issued him a 30-day letter, and then suspended the examination. ................................................................................... 16 Served 11/04/26  2 [*2] The civil examination was suspended; criminal proceedings were conducted, during which the usual three-year periods for assessing tax for tax years 2008 and 2009 expired. ................ 25 The IRS resumed the civil examination, issued a 2018 30-day letter, heard Pinckney’s administrative appeal, and issued the Notice of Deficiency. ................................................................. 31 The Court conducted pretrial proceedings, and the IRS acquired the Daitech bank records from First Community Bank. .............. 35 The trial occurred. .................................................................................. 36 OPINION ................................................................................................ 40 I. We sustain all the adjustments underlying the 2008 deficiency determination, except for the adjustment of Daitech’s gross receipts to $382,243, which we determine to instead be $376,712, and except for the adjustment to self- employment tax, the amount of which must account for our finding that Daitech’s gross receipts for 2008 are less than the amount determined in the Notice of Deficiency. ..................... 40 A. Pinckney failed to report $3,352 of interest income. ............. 40 B. Pinckney Business Consulting earned $463 more in gross receipts than was reported on the relevant Schedule C. .............................................................................. 43 C. The gross receipts for Daitech are $376,712, rather than $200,500 as reported on Pinckney’s return, or $382,243 as determined in the Notice of Deficiency.............................. 44 D. The business-expense deductions for Pinckney Business Consulting are $3,313, not $8,089 as reported on the Schedule C. .............................................................................. 59 E. Daitech’s cost of goods sold is zero, not $23,231 as reported on Daitech’s Schedule C. .......................................... 61 F. The Notice of Deficiency did not err in determining that the business-expense deductions for Daitech are $132,444, not $141,883 as reported on the Schedule C. ........ 61  3 [*3] G. As determined by the Notice of Deficiency, the amount of Pinckney’s home-mortgage-interest deduction for 2008 is $39,667. ..................................................................... 101 H. The determination in the Notice of Deficiency that Pinckney’s charitable-contribution deduction for 2008 is $4,840, rather than the $5,350 he claimed, is sustained. ... 102 I. For 2008, Daitech was a disregarded entity rather than an S corporation, and therefore Pinckney’s self- employment income includes income with respect to Daitech’s activities. ............................................................... 102 II. We sustain all the adjustments underlying the 2009 deficiency determination, except for the adjustment of Daitech’s business-expense deductions to $63,199, which we determine to instead be $66,963, and except for the adjustment to self-employment tax, the amount of which must account for our findings that Daitech’s business- expense deductions are greater than the amount determined in the Notice of Deficiency. ........................................................... 110 A. Pinckney failed to report $20 of other income. .................... 110 B. Pinckney failed to report $445 of capital-gain income. ....... 111 C. Pinckney failed to report $292 of dividend income. ............. 113 D. We sustain the determination in the Notice of Deficiency that the amount of gross receipts and other income for Daitech is $340,765, rather than the $143,080 reported on Pinckney’s return. ............................................................ 114 E. Daitech’s cost of goods sold is zero, not $30,667 as reported on the Schedule C................................................... 121 F. Daitech’s business-expense deductions are $66,963 rather than the $63,199 determined in the Notice of Deficiency. ............................................................................. 122 G. The Notice of Deficiency did not err in disallowing the $5,000 deduction for self-employed health insurance. ........ 160  4 [*4] H. The Notice of Deficiency did not err in determining that Pinckney’s charitable contribution deduction is $3,850, rather than $4,350 as claimed on his return. ...................... 161 I. For 2009, Daitech was a disregarded entity rather than an S corporation, and therefore Pinckney’s self- employment income includes income with respect to Daitech’s activities. ............................................................... 161 J. The deficiency for 2009 is unaffected by Pinckney’s submission of an amended return for 2009.......................... 162 III. Pinckney is liable for penalties under section 6663(a) for 2008 and 2009. ....................................................................................... 162 A. Pinckney is liable for the section 6663(a) fraud penalty for tax year 2008. .................................................................. 165 1. The IRS has proven by clear and convincing evidence that Daitech’s cost of goods sold was zero rather than $23,231. ...................................................... 165 2. The IRS has proven by clear and convincing evidence that Pinckney’s claim that Daitech’s cost of goods sold was $23,231 was fraudulent. ................... 166 3. Pinckney has failed to prove by a preponderance of the evidence that his underpayment for 2008 is less than the deficiency we redetermine for 2008. .............. 168 4. Pinckney failed to prove by a preponderance of the evidence that any portion of the underpayment for 2008 is not attributable to fraud. .................................. 169 B. Pinckney is liable for the section 6663(a) fraud penalty for tax year 2009. .................................................................. 169 1. The IRS has proven by clear and convincing evidence that Daitech’s cost of goods sold was zero rather than $30,667. ...................................................... 169 2. The IRS has proven by clear and convincing evidence that Pinckney’s claim that Daitech’s cost of goods sold was $30,667 was due to fraud. ................ 170  5 [*5] 3. Pinckney failed to prove by a preponderance of the evidence that his underpayment for 2009 is less than the deficiency we determine for 2009................... 170 4. Pinckney failed to prove by a preponderance of the evidence that any portion of his underpayment for 2009 is not attributable to fraud. .................................. 171 IV. The periods of limitation for assessment as to tax years 2008 and 2009 did not expire before the IRS mailed the Notice of Deficiency. ..................................................................................... 171 V. In this deficiency proceeding, this Court does not have jurisdiction to determine whether the restitution-based assessments violated section 6201(a)(4)(B). ................................ 173 VI. Pinckney’s argument that Myers misrepresented the nature of the examination, and that this alleged misrepresentation violated his Fourth Amendment rights, lacks merit. .................. 175 VII. The Court did not commit any prejudicial errors during the trial. ............................................................................................... 180 A. The Court did not err in having the IRS present its case first. ....................................................................................... 180 B. The Court did not err in not granting a continuance for Pinckney to attempt again to serve a subpoena on Myers. .................................................................................... 181 C. Pinckney’s argument that the Court made adverse inferences from Pinckney’s refusal to testify, and that the Court erred in allegedly making such inferences, lacks merit. ............................................................................ 182 D. Pinckney’s argument that the Court refused to allow Pinckney to cross-examine witnesses, and that the Court erred in allegedly so refusing, lacks merit. .......................... 182  6 [*6] MEMORANDUM FINDINGS OF FACT AND OPINION MORRISON, Judge: In a Notice of Deficiency dated February 6, 2019, respondent, the Commissioner of Internal Revenue, determined the following deficiencies and penalties with respect to the 2008 and 2009 tax returns of petitioner Eric Maurice Pinckney: Year Deficiency § 6663 Penalty1 2008 $71,581 $53,685.75 2009 75,638 56,728.50 Pinckney timely filed his Petition with this Court on March 13, 2019, seeking review of the deficiency and penalty determinations. We have jurisdiction pursuant to section 6213(a). We hold: 1. Pinckney had unreported interest income of $3,352 for the 2008 tax year, as determined in the Notice of Deficiency. See infra Part I.A. 2. Pinckney failed to report $463 of gross receipts of Pinckney Business Consulting for the 2008 tax year, as determined in the Notice of Deficiency. See infra Part I.B. 3. Daitech had gross receipts of $376,712 for the 2008 tax year rather than $382,243 as determined in the Notice of Deficiency or $200,500 as reported by Pinckney on this return. See infra Part I.C. 4. The Notice of Deficiency correctly disallowed $4,776 of business- expense deductions Pinckney claimed on the Schedule C, Profit or Loss From Business, for Pinckney Business Consulting for 2008. See infra Part I.D. 1 Unless otherwise indicated, references to sections are to the Internal Revenue Code of 1986, Title 26 of the United States Code (I.R.C.), in effect at all relevant times; regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times; and Rule references are to the Tax Court Rules of Practice and Procedure. We refer to the respondent as the IRS (the initialism for the Internal Revenue Service).  7 [*7] 5. The Notice of Deficiency correctly determined that Daitech’s cost of goods sold is zero for 2008 rather than $23,231 as reported by Pinckney on his return. See infra Part I.E. 6. The Notice of Deficiency correctly determined that Daitech’s business-expense deductions are $132,444 for 2008, not $141,883 as claimed by Pinckney on his return. See infra Part I.F. 7. The Notice of Deficiency correctly determined that Pinckney’s home-mortgage interest deduction for 2008 is $39,667 rather than $69,981 as claimed on his return. See infra Part I.G. 8. The Notice of Deficiency correctly determined that Pinckney’s charitable-contribution deduction for 2008 is $4,840 rather than $5,350 as claimed on his return. See infra Part I.H. 9. For 2008, Daitech was a disregarded entity, not an S corporation, and therefore Pinckney’s self-employment income includes income with respect to Daitech’s activities. See infra Part I.I. 10. For 2009, Pinckney failed to report $20 of other income, as determined by the Notice of Deficiency. See infra Part II.A. 11. For 2009, Pinckney failed to report $445 of capital-gain income, as determined by the Notice of Deficiency. See infra Part II.B. 12. For 2009, Pinckney failed to report $292 of dividend income, as determined by the Notice of Deficiency. See infra Part II.C. 13. For 2009, Daitech had gross receipts and other income of $340,765, as determined by the Notice of Deficiency, rather than $143,080 as reported on Pinckney’s return. See infra Part II.D. 14. The Notice of Deficiency correctly determined that Daitech’s cost of goods sold is zero for 2009, not $30,667 as reported by Pinckney on the Schedule C for Daitech. See infra Part II.E. 15. Daitech had business-expenses deductions of $66,963 for 2009, rather than $63,199 as determined in the Notice of Deficiency or $60,202 as claimed on the Schedule C. See infra Part II.F. 16. The Notice of Deficiency was correct to disallow a $5,000 deduction for self-employed health insurance claimed by Pinckney on his return for 2009. See infra Part II.G.  8 [*8] 17. The Notice of Deficiency did not err in determining that Pinckney’s charitable-contribution deduction is $3,850 for 2009, not $4,350 as claimed on his return. See infra Part II.H. 18. For 2009, Daitech was a disregarded entity rather than an S corporation, and therefore Pinckney’s self-employment income includes income with respect to Daitech’s activities. See infra Part II.I. 19. Pinckney is liable for penalties under section 6663(a) for 2008 and 2009. See infra Part III. 20. The periods of limitation for assessment as to tax years 2008 and 2009 did not expire before the IRS mailed the Notice of Deficiency. See infra Part IV. 21. The Court does not have jurisdiction in this case to determine that the restitution-based assessments violated section 6201(a)(4)(B). See infra Part V. 22. Myers did not violate Pinckney’s Fourth Amendment rights by misrepresenting the nature of the examination. See infra Part VI. 23. The Court did not commit prejudicial errors during the trial. See infra Part VII. FINDINGS OF FACT Pinckney resided in South Carolina when he filed his Petition. 2 Pinckney owned and operated Daitech Tax Services, LLC. Pinckney has a master’s degree in computer information systems from Webster University. On November 22, 2002, Pinckney organized Daitech Tax Services as a limited liability company (LLC) in the State of South Carolina. 2 Section 7482(b) governs the venue for appeal from a decision of this Court. Unless the parties stipulate to the contrary, the appellate venue is the circuit in which the individual petitioner resided when the petition was filed. § 7482(b)(1)(A). South Carolina is in the Fourth Circuit. 28 U.S.C. § 41. Under the rule laid down in Golsen v. Commissioner, 54 T.C. 742, 756–57 (1970), aff’d, 445 F.2d 985 (10th Cir. 1971), we abide by Fourth Circuit precedent squarely on point in deciding this case.  9 [*9] Pinckney has always been the sole member of Daitech. Daitech was in the business of preparing and filing tax returns. By 2008, Daitech had adopted a practice of preparing federal income tax returns for its customers that produced modest refunds through the manipulation of a refundable credit called the earned income credit. The amount of this credit varies with the taxpayer’s earned income (defined as wages and self-employment income). § 32(b)(2), (c)(2)(A). As earned income increases, the amount of the credit increases as well. § 32(a)(1). But after a point, an increase in earned income results in a decrease in the credit. § 32(a)(2)(B). If a customer’s actual earned income was too low, Pinckney would inflate the customer’s business income on the customer’s Schedule C to increase the reported earned income to the amount that would produce the peak refund. If a customer’s actual earned income was too high, Pinckney would underreport gross income, or fabricate business-expense deductions, on the customer’s Schedule C to push the reported earned income down to the amount that would produce the peak refund. One method by which Pinckney would underreport gross income on the Schedule C would be to falsely claim that a Daitech customer’s business income should be reduced by cost of goods sold. Daitech received fees when its customers received their refunds. During 2008 and 2009, Lemuel Brown was employed as the office manager of Daitech. During 2008 and 2009, Brandon Samuels was employed as the tax account manager of Daitech. During 2008 and 2009, Pinckney owned a house on 155 Dunleith Way, Irmo, South Carolina, which was his principal residence. Daitech’s main office was at 2005 Hampton Street, Columbia, South Carolina. Daitech also had an office at 4430 Broad River Road, Columbia, South Carolina. Daitech may have had other offices, but the record does not indicate whether these offices were in operation during 2008 and 2009. Daitech’s offices were rented rather than owned. Pinckney’s 2008 return suggests, through its claim of deductions for the “business use of home” on the Schedule C for Daitech, that Pinckney’s house in Irmo was used by Daitech in Daitech’s operations. However, there is insufficient evidence to support a finding that Daitech work was performed at his  10 [*10] house, and thus, we find that Daitech work was not performed at his house. One of Pinckney’s accounts was the Daitech Account. In 2008 and 2009, Pinckney owned a bank account at First Community Bank in Daitech’s name with an account number ending in 6122 (the “Daitech Account”). The trial record contains records from the Daitech Account, consisting of bank statements, copies of checks written on the account, “Cash In Tickets” (documents prepared by the bank teller each time an account holder deposited cash, showing the date and amount of the deposit), and deposit slips (documents prepared by an account holder each time an account holder made a deposit of cash or checks, showing the date of the deposit, the total amount of checks deposited, and the amount of any cash deposited). These records are limited to 2008 and 2009. The bank records for the Daitech Account indicate that Pinckney had other financial accounts. Taking 2008, for example, Pinckney made payments to financial accounts at Bank of America and E*Trade Bank from the Daitech Account. And during 2008, the Daitech Account received deposits from an account at First National Bank of Omaha with an account number ending in 4276, and from an account with American Funds Investment, both of which Pinckney owned. Furthermore, during 2008 Pinckney made payments from the Daitech Account to the following creditors (including for credit cards): Bank of America, First National Bank of Omaha for an account ending in 0467, Discover, IndyMac Bank, Sallie Mae Educational Loan, and SunTrust. There are no account statements in the trial record for any financial accounts or lending relationships other than for the Daitech Account. For the 2008 tax year, One West Bank FSB issued a Form 1099– INT, Interest Income, to Pinckney stating it had paid him $3,326 of interest. It sent a copy of the form to the IRS. The payments were not deposited into the Daitech Account. For the 2008 tax year, Carolina Collegiate Federal Credit Union issued a Form 1099–INT to Pinckney stating it had paid him $26 of interest. It sent a copy of the form to the IRS. The payments were not deposited into the Daitech Account. For the 2008 tax year, Daitech issued a Form 1099–MISC, Miscellaneous Income, to Pinckney, stating that it had paid $19,900 in nonemployee compensation. Pinckney reported this amount as $9,900  11 [*11] on an unsigned Form 1040–X, Amended U.S. Individual Income Tax Return, for the 2008 tax year. The payments were not deposited into the Daitech Account. For the 2008 tax year, Indymac Federal Bank Home Servicing issued Pinckney a Form 1098, Mortgage Interest Statement, stating that he had paid mortgage interest of $36,362.3 For the 2009 tax year, E*Trade Clearing, LLC, issued a Form 1099–MISC to Pinckney stating it had paid him $20 in income. It sent a copy of the form to the IRS. The payment was not deposited into the Daitech Account. For the 2009 tax year, E*Trade Clearing, LLC, issued a Form 1099–B, Proceeds From Broker and Barter Exchange Transactions, to Pinckney stating he had received capital gain income of $445. It sent a copy of the form to the IRS. The payments were not deposited into the Daitech Account. For the 2009 tax year, E*Trade Clearing, LLC, issued a Form 1099–DIV, Dividends and Distributions, stating he had received dividend income of $292. It sent a copy of the form to the IRS. The payments were not deposited into the Daitech Account. On May 12, 2009, Pinckney filed his 2008 return, which included Schedule Cs, Profit and Loss From Business, for both Daitech and Pinckney Business Consulting. On April 13, 2009, the due date for Pinckney to file his 2008 return was extended to October 15, 2009. On May 12, 2009, Pinckney filed his federal income tax return on Form 1040, U.S. Individual Income Tax Return, for the 2008 tax year. He reported the following: 3 Pinckney’s tax year 2009 Form 1098 is not at issue as the IRS did not adjust the amounts Pinckney reported on it.  12 [*12] Item Amount Income Wages $18,807 Taxable refunds, credits or offsets of 420 state and local income taxes Business income 41,773 Total income 61,000 Adjusted gross income One-half of self-employment tax 2,952 Adjusted gross income 58,048 Itemized deductions 83,697 Taxable income 0 Tax (before self-employment tax) 0 Self-employment tax 5,903 Total tax 5,903 Payments Federal income tax withheld 2,892 Total payments $2,892 Amount owed4 $3,055 The return did not include a copy of any Form W–2, Wage and Tax Statement, even though it reported that Pinckney earned $18,807 in wages. The return did not include a copy of the Form 1099–INT from One West Bank FSB, the Form 1099–INT from Carolina Collegiate Federal Credit Union, or the Form 1099–MISC from Daitech. Pinckney reported the following on his Schedule A, Itemized Deductions: 4 Pinckney miscalculated the amount owed as $3,055. Pinckney reported total tax of $5,903 and total payments of $2,892. The amount owed is the difference between total tax and total payments. The total tax ($5,903) minus the total payments ($2,892) equals $3,011, not $3,055.  13 [*13] Item Amount Taxes you paid General sales taxes $4,850 Real estate taxes 1,966 Personal property taxes 1,100 Other taxes (license renewals, etc.) 450 Total $8,366 Interest you paid Home mortgage interest 69,981 Total $69,981 Gifts to Charity Gifts by cash or check 4,850 Other than by cash or check 500 Total $5,350 Total itemized deductions $83,697 Pinckney reported the following on the Schedule C for Daitech: Item Amount Income Gross receipts or sales $200,500 Cost of goods sold 23,231 Gross profit $177,269 Other income 0 Gross income 177,269 Expenses Advertising 3,850 Car and truck expenses 7,335 Contract labor 17,431 Office expense 6,582 Rent or lease 15,600 Supplies 982 Taxes and licenses 125 Deductible meals and entertainment 4,850 Utilities 10,552 Wages 51,244 Other expenses 20,068 Expenses for business use of home 3,264 Total expenses $141,883 Net profit $35,386 The Schedule C for Daitech reported that the $23,231 cost-of- goods-sold amount was the sum of the following amounts: $17,431 for cost of labor, $4,550 for materials and supplies, and $1,250 for other costs. Pinckney reported the following on the Schedule C for Pinckney Business Consulting:  14 [*14] Item Amount Income Gross receipts or sales $16,057 Cost of goods sold 1,581 Gross profit $14,476 Other income 0 Gross income 14,476 Expenses Car and truck expenses 3,313 Office expenses 2,415 Deductible meals and entertainment 1,061 Utilities 1,300 Total expenses $8,089 Net profit $6,387 Pinckney reported on the Schedule SE, Self-Employment Tax, to his Form 1040 that his income from self-employment was $41,773, which was the sum of the $35,386 profit he reported for Daitech and the $6,387 profit he reported for Pinckney Business Consulting. The Form 1040 stated that it was prepared by Brown. This may have been true. However, the return was filed and approved by Pinckney. On April 6, 2010, Pinckney filed his 2009 return, which included a Schedule C for Daitech but not Pinckney Business Consulting. On April 6, 2010, Pinckney filed his federal income tax return for his 2009 tax year. The due date for filing the return had been extended to October 15, 2010. On his Form 1040, Pinckney reported the following:  15 [*15] Item Amount Income Wages $26,100 Taxable interest 6,736 Business income 52,211 Unemployment compensation 4,160 Total income $89,207 Adjusted gross income One-half of self-employment tax 3,689 Self-employed SEP, SIMPLE and 5,000 qualified plans Adjusted gross income 80,518 Itemized deductions 53,870 Exemptions 3,650 Taxable income 22,998 Tax (before self-employment tax) 3,029 Self-employment tax 7,377 Total tax 10,406 Payments Federal income tax withheld 6,273 Making-work-pay credit 290 Total payments $6,563 Amount owed $3,843 The return included a Form W–2 that stated that Pinckney was employed by Daitech, which paid him gross wages of $26,100 and withheld $5,613 of federal income tax. The return did not include the Form 1099–INT from E*Trade Clearing, LLC, the Form 1099–B from E*Trade Clearing, LLC, the Form 1099–DIV from E*Trade Clearing, LLC, nor the Form 1099–MISC from E*Trade Clearing, LLC. Pinckney reported the following on his Schedule A: Item Amount Taxes you paid General sales taxes $4,280 Real estate taxes 4,107 Other taxes (license renewals, etc.) 653 Total $9,040 Interest you paid Home mortgage interest 40,480 Total $40,480 Gifts to charity Gifts by cash or check 3,850 Other than by cash or check 500 Total $4,350 Total itemized deductions $53,870  16 [*16] Pinckney reported the following on the Schedule C for Daitech: Item Amount Income Gross receipts or sales $5,530 Cost of goods sold 30,667 Gross profit $(25,137) Other income 137,550 Gross income 112,413 Expenses Advertising 5,250 Car and truck expenses 7,675 Contract labor 3,452 Office expense 7,250 Other business property 15,600 Taxes and licenses 365 Travel 450 Deductible meals and entertainment 5,460 Utilities 11,450 Other expenses 3,250 Total expenses $60,202 Net profit $52,211 The Schedule C for Daitech did not claim any deduction for the expenses of the business use of a home. It reported that the $30,667 cost- of-goods-sold amount was the sum of $25,417 in cost of labor and $5,250 for materials and supplies. Pinckney did not include a Schedule C for Pinckney Business Consulting with his 2009 return. Pinckney reported on the Schedule SE to his Form 1040 that his income from self-employment was $52,211, which was the profit he reported for Daitech. The Form 1040 stated that it was prepared by Brown. This may have been true. However, the return was filed by Pinckney and approved by Pinckney. The IRS began a civil examination of Pinckney’s 2008 and 2009 returns, issued him a 30-day letter, and then suspended the examination. Pinckney’s 2008 tax return was selected by the IRS for civil examination. The return was selected pursuant to a random audit. On August 6, 2010, the IRS assigned Tax Compliance Officer Carlton Myers to the examination.  17 [*17] On September 21, 2010, Myers mailed Pinckney an initial contact letter notifying him that his 2008 tax return had been selected for examination and asking Pinckney to contact Myers within 10 days to set up an interview. The letter stated that the examination would be primarily focused on the car-and-truck expenses reported on the Schedule C for Pinckney Business Consulting, the cost of goods sold reported on the Schedule C for Daitech, and the Schedule A home- mortgage-interest deduction. On September 30, 2010, Myers interviewed Pinckney at an IRS office in Columbia, South Carolina. On February 11, 2011, Myers expanded the examination to include Pinckney’s 2009 tax year. During the examination, Pinckney provided Myers with some receipts to substantiate his claimed Schedule A deductions and claimed Schedule C business-expense deductions for 2008 and 2009. As trial testimony suggests, some of the receipts were illegible and none were offered as evidence at trial. Testimony about the receipts was vague, and thus very little is known about these receipts. During the examination, Pinckney also provided Myers with documents to show that the gross receipts of Pinckney Business Consulting for 2008 were $16,520. These documents were (1) a one-page computer printout of deposits totaling $10,363, which was admitted as Exhibit 36-J; (2) a Form 1099–MISC from HSBC Taxpayer Financial Services, Inc., showing $1,117 of payments to Pinckney, which was admitted as Exhibit 35-J; and (3) a Form 1099–MISC from HSBC Taxpayer Financial Services, Inc., showing $5,040 of payments to Pinckney, which was admitted as Exhibit 33-J. On January 19, 2012, Myers issued a 30-day letter to Pinckney that stated adjustments to Pinckney’s 2008 and 2009 returns. This 30- day letter will be referred to as the 2012 30-day letter. A second 30-day letter was issued on May 18, 2018. This 30-day letter will be referred to as the 2018 30-day letter. In discussing the 2012 30-day letter and the 2018 30-day letter, we will often compare these letters to the Notice of Deficiency. The Notice of Deficiency will sometimes be referred to as the 90-day letter. Set forth in the table below are the adjusted amounts shown by the 2012 30-day letter regarding Pinckney’s Form 1040 for 2008. This table and similar tables also show the following additional information:  18 [*18] (1) the adjusted amounts shown in the 2018 30-day letter, which were the same as the adjusted amounts in the 90-day letter; and (2) the magnitude of the adjustment made by the 90-day letter as compared with the Form 1040: Item Return 2012 2018 Positive (2008 30-day 30-day (negative) Form letter letter & 90- adjustment 1040) day letter Personal-exemption deductions $0 $0 $1,073 $1,073 Income Wages 18,807 18,807 18,807 0 Taxable interest 0 0 3,352 3,352 Taxable refunds, credits, or 420 420 420 0 offsets of state and local income taxes Business income 41,773 91,317 261,425 219,652 Total income $61,000 $110,544 $284,004 $223,004 Adjusted gross income One-half of self-employment 2,952 6,452 9,825 6,873 tax Self-employed health insurance 0 1,568 1,568 1,568 deduction Adjusted gross income 58,048 125,386 272,611 214,563 Itemized deductions 83,697 49,568 51,746 (31,951) Taxable income (29,149) 52,809 218,438 247,587 Income tax 0 9,550 57,835 57,835 Self-employment tax 5,903 12,903 19,649 13,746 Total tax 5,903 22,453 77,484 71,581 Deficiency $16,550 $71,581 Set forth below are the adjusted amounts shown in the 2012 30- day letter and 2018 30-day letter as compared with Pinckney’s Schedule A for 2008:  19 [*19] Item Return 2012 30-day 2018 30-day Positive (Schedule notice notice & 90- (negative)