- 49 -
the mere failure to report income is not sufficient to establish
fraud. Petzoldt v. Commissioner, supra at 700.
The record in this case establishes, inter alia, that
(1) Mr. Katerelos substantially underreported the gross receipts
of NDV for each of the years 1987 through 1990; (2) he activated
the Z or reset mode on the cash register more than once on a
number of days during each of those years, but reported the total
sales from only one such Z reading on those days as the amount of
gross receipts of NDV even though he knew he was required to
report the transaction totals of all sales made by NDV as gross
receipts for those years; (3) during each of the years 1987
through 1990, Mr. Katerelos discarded the portions of the cash
register tapes that he did not utilize to calculate the amounts
of gross receipts that he recorded in the gross receipts journal
for each such year; (4) Mr. Katerelos discarded all of the guest
checks for the years 1987 through 1990; (5) Mr. Katerelos pro-
vided his accountant with only the gross receipts journals and
the portions of the cash register tapes that he saved and uti-
lized to calculate the amounts of gross receipts that he recorded
therein; (6) the pattern of missing transactions repeated itself
on a regular basis during each of the years 1987 through 1990
until September 1990 when Mr. Phielix first confronted petition-
ers concerning his analyses of the cash register tapes; (7) Mr.
Katerelos provided implausible explanations as to the nature of
the missing transactions and as to why the cash register tapes
Page: Previous 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 NextLast modified: May 25, 2011