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the discount was applied, a lesser amount would be arrived at for
1989.
Petitioners have chosen to rely on a discounted 1990 figure
less the above-mentioned expenses instead of producing their
books and records so that a calculation of actual personal living
expenses for 1989 could be made. Petitioners have offered no
explanation for their failure to produce any books and records
for 1989. Without proof of actual personal living expenses for
1989, we cannot conclude that respondent's determination of
petitioners' personal living expenses for 1989 is incorrect or
unreasonable.
Petitioners also object to respondent's use of a "plugged"
figure of $17,411 in her computation of personal living expenses
for 1990. The revenue agent testified that this amount
represented the difference between the bank account balances and
the analysis of personal living expenses for 1990 provided to
respondent by petitioners. The revenue agent also testified that
petitioners did not provide any explanations or canceled checks
to support any other treatment of this amount. Petitioners also
failed at trial to offer any explanation of the difference
between the bank account balances and petitioners' calculation of
their personal living expenses. Respondent's determination that
petitioners' personal living expenses for 1990 include $17,411 of
unexplained expenses will be sustained.
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