Mary Ann and Wilson R. Collins - Page 4

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            Cosmetics Co., in which she sold the beauty products of that                                 
            company.  Petitioner had been engaged in this activity for                                   
            approximately 10 years.  Wilson R. Collins was employed by a                                 
            private security firm during the years at issue.  In addition to                             
            petitioner's Mary Kay Cosmetics activity, petitioners owned an                               
            apartment building during the years at issue.  On their Federal                              
            income tax returns, petitioners reported their income and                                    
            expenses from the Mary Kay Cosmetics activity and the apartment                              
            building rental activity on Schedules C and E, respectively,                                 
            Profit or Loss From Business, and Supplemental Income and Loss.                              
                  The determinations of the Commissioner in a notice of                                  
            deficiency are presumed correct, and the burden is on the                                    
            taxpayer to show that the determinations are in error.  Rule                                 
            142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).  Further,                              
            section 6001 requires, in pertinent part, that "Every person                                 
            liable for any tax * * * shall keep such records, render such                                
            statements, make such returns, and comply with such rules and                                
            regulations as the Secretary may from time to time prescribe."                               
            Section 1.6001-1(a), Income Tax Regs., provides, in pertinent                                
            part, that "any person subject to tax under subtitle A of the                                
            Code * * *, shall keep such permanent books of account or                                    
            records, including inventories, as are sufficient to establish                               
            the amount of gross income, deductions, credits, or other matters                            
            required to be shown by such person in any return of such tax".                              

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