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affidavits to the MDR that stated that the cash register worked
properly.
The IRS Audit
Mr. Burgess met with Mr. McGirl and Ms. Berg on November 23,
1992. Mr. McGirl, for the first time, stated that he had
borrowed money from a friend, Mr. McAllister. Mr. McGirl did not
state the amount of the alleged loans or produce any
documentation to support their existence at this meeting. Mr.
McGirl also mentioned for the first time that he was involved
with another business; i.e., the purchase and sale of used
restaurant equipment. Mr. McGirl never produced the cash
register tapes, invoices, copies of store leases, automobile
logs, or the pieces of paper given to him by Mrs. McGirl on which
she tallied the daily sales. Other than canceled checks and
invoices submitted in connection with legal expenses, Mr. McGirl
failed to present any supporting documentation to substantiate
the Yogurt Station's expenses.
Petitioners' Check Spreads
Although petitioners did not maintain a cash disbursement
journal in the regular course of their business, they did prepare
check spreads prior to trial, in anticipation of this case.
There is a separate check spread for each year in issue. Each
check spread lists the number, date, payee, and amount for each
of the business checks. The checks are "spread" across the page
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Last modified: May 25, 2011