- 16 -
McGirl testified that he kept the auto logs underneath the front
seat of his automobile, but the individual pages of the logs are
in pristine condition, totally inconsistent with that manner of
storage. The auto logs indicate Mr. McGirl's lack of
credibility. We find that petitioners have not proven that the
Yogurt Station is entitled to automobile expense deductions in
excess of those allowed by respondent.
2. Unreported Income
Mr. McGirl's explanation of the underreporting of the Yogurt
Station's gross receipts revolves around an alleged business
activity that was not reported on the Yogurt Station's or
petitioners' tax returns and purported loans used to finance the
alleged activity.
a. Mr. McGirl's Alleged Restaurant Equipment Business
Mr. McGirl testified that he carried on a business6 totally
apart from the Yogurt Station; i.e., the sale of used restaurant
equipment and maintenance of refrigeration equipment. He
allegedly bought used restaurant equipment at auctions, sometimes
cleaned and fixed it up, and sold the equipment to bars and
restaurants. This business had no fixed location; Mr. McGirl
supposedly would stop by bars and restaurants and offer to sell
them the used equipment or to perform maintenance on their
refrigeration equipment. All of the alleged business activity
6 The use of the term "business" is for convenience only and
does not imply a finding that any such business existed.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011