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to identify what was purchased and whether it was for business or
personal use. One of the Yogurt Station's largest suppliers,
Sam's Wholesale Club, is well known for selling nonfood items.
Petitioners wish to deduct as rent three checks payable to
Cherokee State Bank, which is both the Yogurt Station's and
petitioners' personal bank. There were no leases, documents, or
nonparty testimony explaining why checks were made payable to
Cherokee State Bank. Petitioners wish to deduct checks, some of
which are in excess of $1,000, payable to individuals and to cash
for maintenance and repair. Without supporting documentation,
deductions for checks written to cash and to individuals are
highly suspect.
Petitioners claim to have underreported the Yogurt Station's
payment of compensation and wages; the amount allegedly
underreported for 1989 is $6,262. The 1989 check spread shows
that petitioners were paid $6,936 more than the amount reported
on their return.12 Petitioners want the Yogurt Station to have
an increased deduction for wages, although they have failed to
personally report a corresponding increase in wages. Their claim
to the additional deduction has not been substantiated.
Petitioners wish to claim deductions for equipment
purchases; it is a separate category on the check spreads.
12 On their respective 1989 returns, petitioners reported
$13,925 as wages from the Yogurt Station and it deducted a like
amount. However, the check spread indicates that the Yogurt
Station paid petitioners $20,861 in 1989.
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