Mark D. Pridgen and Kay D. Pridgen - Page 13




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             The parties have stipulated that the Forms MQ-79 filed on                
             behalf of Beaufort Leaf for 1990 report aggregate sales                  
             of flue-cured tobacco of $1,225,535, the amount used by                  
             respondent in computing the partnership's sales.                         
             Similarly, the parties have stipulated that the Forms                    
             MQ-79, filed on behalf of Beaufort Leaf for 1990, report                 
             aggregate sales of burley tobacco of $853,015, the amount                
             used by respondent in recomputing the partnership's sales.               
             Thus, the additional income from sales of flue-cured and                 
             burley tobacco computed by respondent for 1990 is based                  
             upon the sales reported in the Forms MQ-79 filed on behalf               
             of Beaufort Leaf.  Respondent determined the amount of                   
             unreported sales from so-called pickens tobacco on the                   
             basis of three receipts which state that Beaufort Leaf                   
             sold pickens tobacco to H.D. Pegram on June 5, 1990, in                  
             the aggregate amount of $74,678.                                         
                  The attachment referred to in the explanation                       
             accompanying the notices of deficiency also states that                  
             the unreported tobacco sales of Beaufort Leaf for 1991                   
             were recomputed on the basis of "checks written to Beaufort              
             Leaf Tobacco Company from auction sales of tobacco but not               
             deposited to the business account" in the aggregate amount               
             of $1,054,576 and not included in the gross income reported              
             by the partnership for 1991.  The record of this case                    





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