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for less than the price petitioners had marked on the item, they
adjusted that item's price accordingly. None of their
merchandise was sold below cost.
Usually, petitioners left on Friday morning when they were
going to a Saturday show. Once they arrived at the show, they
unloaded the merchandise and set up their tables. The shows were
generally held on Saturday and Sunday and lasted 7 hours each
day. On Sunday evening they packed the merchandise that was not
sold into their truck and returned home.
Petitioners did not hire an accountant to assist with the
preparation of Red Caboose's books and records. They did not
have a traditional bookkeeping system for the activity. Red
Caboose's records were kept in the same way Mr. Lencke had
previously kept his insurance business records. To keep track of
merchandise sold during a show, petitioners dictated descriptions
of the items sold into a hand-held tape recorder. Once they
returned home, they listened to the tape and made a note of the
amount of money received and the items sold at each show. During
1990 and 1991, petitioners recorded the amount and nature of Red
Caboose's sales in their personal appointment book. During 1992,
they prepared a tally sheet for each show indicating which items
were sold and the amount of money received at each show.6
6 Petitioners testified that Red Caboose's sales were
recorded in their personal ledger during the years in issue.
However, the stipulation of facts to which the parties agreed
(continued...)
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