Haralampos Katerelos and Irene Katerelos - Page 40

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            readings that Mr. Katerelos ignored in calculating the amounts of                             
            gross receipts of NDV that petitioners reported in their returns                              
            for those years, they also listed transactions that increased the                             
            grand total maintained by the cash register.                                                  
                  By analyzing the cash register tapes that Mr. Katerelos                                 
            saved for 1987 through 1990, respondent was able to ascertain the                             
            number of missing transactions that did not appear on any of the                              
            cash register tapes that Mr. Katerelos saved for those years and                              
            the Z reading differences in grand totals.  Respondent determined                             
            that the amount of any such Z reading difference, less (1) the                                
            amount of gross receipts recorded by Mr. Katerelos in the gross                               
            receipts journals for a particular day and (2) any adjustments                                
            for amounts treated as overrings or shortages of cash for that                                
            particular day, constituted the amount of daily gross receipts of                             
            NDV that Mr. Katerelos was required to, but did not, report in                                
            petitioners' returns for each of the years 1987 through 1990.34                               
                  The amount of daily gross receipts of NDV that Mr. Katerelos                            
            had recorded in the gross receipts journals for a minimum of 650                              
            of the 1,440 days throughout the period 1987 through 1990 on                                  


            34  The amounts that respondent determined constituted additional                             
            gross receipts of NDV that Mr. Katerelos did not report in                                    
            petitioners' returns for 1987 through 1990 included sales tax                                 
            that petitioners collected on sales by NDV.  Petitioners do not                               
            argue that respondent's determinations of the amounts of their                                
            underpayments for those years should be reduced by the amounts of                             
            sales tax included in the unreported gross receipts determined by                             
            respondent, presumably because petitioners did not pay any sales                              
            tax that they collected on unreported transactions to the appro-                              
            priate local tax authorities.                                                                 


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