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businesses marketed and promoted family seminars about "self-
improvement", vitamins, nutritional products, health care, and
exercise programs. There was a substantial amount of travel
involved. Petitioners, for one reason or another, did not have
complete documentation on numerous items. For example, a
receipt that shows the purchase of gasoline might not indicate
whether the expenditure was one for business or personal.
Compounding these problems was the practice of causing
petitioner corporations to pay both their business and the
Johnsons' personal expenditures, which were accumulated and
divided by estimations at yearend.
The trial evidence consisted of two major components: (1)
The documentation used by respondent's agent during the audit,
and (2) Mr. Johnson's testimony (which petitioners offered to
expand on situations where the documents fell short). Mr.
Johnson was, in several instances, unable to distinguish items
in the available documentation without further information;
this information was not forthcoming. In this regard,
testimony of a controlling shareholder involving corporate
activities has been carefully scrutinized. Alterman Foods,
Inc. v. United States, 505 F.2d 873, 877 (5th Cir. 1974).4
4 The U.S. Court of Appeals for the Eleventh Circuit has
adopted, as binding precedent, decisions of the U.S. Court of
Appeals for the Fifth Circuit issued prior to Oct. 1, 1981.
Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981).
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