Richard K. and Christine M. McGirl - Page 14

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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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