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“correction” of the 1999 ending inventory had been made on
filings as late as July 2004. At the time of trial, Wilkerson
admitted that the amount shown on the tax return as purchases
during 1999 was an error, which she attributed to “an input error
into the computer program that I use for tax preparation by a
part-time person I had working for me.” Wilkerson testified:
Q [Petitioners’ counsel] As far as the cost of
goods sold is concerned that’s on the return versus the
one that’s on the workpapers or the accounting records,
which one is accurate?
A [Wilkerson] The ones that–-in the accounting
records.
Q So that would mean that the return was
overstated by $50,000?
A Yes.
Petitioners have not shown any error in respondent’s calculation
of cost of goods sold for 1999.
In their briefs, petitioners disregard their concession at
trial of the negligence penalty, and they argue that the penalty
amount should be reduced. Even if petitioners were not bound by
their stipulation, which they are, they have not identified, much
less established, any adjustments not due to negligence that
would justify reduction of the penalty.
The record in these cases is thus devoid of any credible
evidence from petitioners that would substantiate any of their
claims. The parties’ briefs devote substantial space to
quarreling with what the revenue agent did or did not do–-matters
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