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contemporaneously prepared auto logs. Petitioners maintained no
books or records other than cash register tapes and a calculation
of daily sales (both thrown away).
Mr. McGirl's State Tax Felony Convictions
On March 18, 1994, Mr. McGirl pleaded guilty to count one of
the amended complaint filed by the State of Minnesota charging
him with making and filing 54 false State sales tax returns, each
involving more than $300 in tax, from the period 1988 through
June 1992.
OPINION
Petitioners admit they underreported the gross receipts of
the Yogurt Station, but argue that they should be allowed
offsetting deductions for expenses which they simultaneously
underreported on the Yogurt Station's corporate tax returns.
Petitioners bear the burden of showing that they are
entitled to the additional deductions and that respondent's
determination of the gross income is incorrect. Rule 142(a);
Welch v. Helvering, 290 U.S. 111 (1933). Since there is
virtually no documentary evidence to support their claims for
increased deductions other than canceled checks, petitioners'
credibility is crucial in meeting their burden. We first shall
examine Mr. McGirl's auto logs as they are offered in support of
the Yogurt Station's automobile expense deductions and are the
only allegedly contemporaneous records retained.
1. Automobile Mileage Deduction
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