- 31 -
petitioner. Petitioner cashed these checks at its bank, and it
returned the cash to the vendors for distribution to the member
stores at the food show. Petitioner also provided the vendors
with cash from the promotional accounts. In both instances,
petitioner required the vendors to sign for the cash received,
and, most importantly, it also required any unused cash to be
returned to it at the end of the food show. This was not a
check-cashing service. Unlike a check-cashing service,
petitioner ensured that the check proceeds were either paid to
its shareholders or returned to it.
Through the food-show book tear strips, petitioner knew the
exact amount of product price promotion distributed at the show,
as the tear strips indicated the product sold and the product
price promotion given by the vendor. Petitioner destroyed these
records.
Petitioner concedes that the $60,000 and the $100,000 checks
it received from Western are gross income. Petitioner converted
these Western checks into cash and gave the cash to Mr. Clawson
to distribute to the member stores at the food show. Although
petitioner kept records showing who received funds from Mr.
Clawson, petitioner destroyed these records.
Mr. Clawson distributed the Western cash in the same manner
that the other vendors distributed their food-show cash--he
provided product promotion cash allowances. For example, if a
Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 NextLast modified: May 25, 2011