Ernest L. and Kathleen Newsome - Page 9

                                                - 9 -                                                  
            Saturday "draw" number to obtain the "weekend differential".                               
            Next, Agent Wilder multiplied the average daily "draw" number by                           
            $10.95 (the daily and weekend rate), and then multiplied the                               
            average Saturday "draw" figure, or weekend differential, by $7.95                          
            (the weekend rate).  These two figures were added together to                              
            obtain the total gross receipts for that month.  Agent Wilder                              
            completed similar computations for each month for the years in                             
            issue in order to estimate gross receipts for each year.  Gross                            
            receipts for each year were then reduced by 10 percent for                                 
            uncollectibles.  The term "uncollectibles" refers to amounts that                          
            could not be collected from subscribers for their newspaper                                
            delivery service.  The Star Telegram advised Agent Wilder that                             
            the uncollectible rate ranged from a low of 5 percent to a high                            
            of 10 percent, depending on the nature of the delivery route.                              
                  Agent Wilder's method of computing gross receipts did not                            
            take into account awards or discounts offered by the Star                                  
            Telegram.  Nor did it take into account the extra newspapers that                          
            petitioner had after completing his deliveries.  Furthermore,                              
            because Agent Wilder did not have access to the ledger sheets,                             
            she could not determine the actual numbers of subscribers to the                           
            various subscription plans.  Consequently, her computations only                           
            take into account the two subscription plans to which                                      
            petitioner's customers most commonly subscribed.                                           
                  Prior to the examination of petitioners' 1991 and 1992                               
            returns, respondent's agents examined the returns of 200 to 300                            




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011