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Question # 5: Is anything else relevant?
a. The special agent should review any loan applications that Jack and Janet submitted to the bank. For example, did they buy their home with borrowed funds or outright in cash?
b. The special agent should investigate transactions that Jack and Janet had with their customers and suppliers. That might help make unreported business income a special items method as opposed to an indirect methods item. Because courts are more cynical of the indirect method, it usually draws more scrutiny from courts than the direct method.
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