Kathleen A. Brown - Page 6

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          applied by obtaining from the restaurant the total sales each               
          individual waitress had made and reducing those sales for                   
          "stiffs", which in this case was based on 13.33 percent of sales,           
          to arrive at sales subject to tips.  The tip rate was then                  
          determined by the average tips as shown on charge sales, reduced            
          by approximately 1 percent, with the resulting percent, which was           
          14.63 percent in this case, applied to the sales subject to tips.           
               On her income tax returns filed for 1991 and 1992,                     
          petitioner claimed the standard deduction of $5,000 for 1991, and           
          $5,250 for 1992 in lieu of itemized deductions.                             
               On certain days the tips petitioner showed on her records              
          were less than the tips shown on the charge slips of her                    
          customers.  It is petitioner's position that at least a                     
          substantial amount, if not all, of the difference in the amount             
          that respondent determined to be her tips and the amount she                
          showed on the records she kept was due to her payout of tips to             
          the busboys, bartenders, cooks, and other waitresses, and her               
          payment for breakage, walkouts, and similar items.                          
                                       OPINION                                        
               The record here shows that, except for mistakes petitioner             
          might have made, her records reported only the cash that she had            


          amount, stating:  "We are convinced that petitioners gave 10 to             
          15 percent of their tips to the captains and that to account for            
          this and other factors respondent's formula should be applied               
          with a 10 percent rather than a 12 percent rate of tipping."                




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