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With respect to the first issue, petitioners contend that
the gross sales receipts reported on Schedule C of their tax
returns for 1989 and 1990 for petitioner's Mary Kay Cosmetics
business were overstated. For 1989, petitioners reported gross
receipts of $29,127. At trial, petitioner contended that the
correct amount of gross receipts for 1989 was $20,356.55. For
1990, petitioners reported gross receipts from the Mary Kay
Cosmetics activity in the amount of $27,827. At trial,
petitioner contended that the correct amount was $18,391.30.
This issue was not alleged in the petition. Petitioner
testified, however, that the matter was brought up in the
conference petitioner had with respondent's Appeals officer after
the notices of deficiency were issued. The Appeals officer did
not agree to any concession or revision of the gross receipts
reported by petitioners for the 2 years in question. At trial,
petitioner offered into evidence a stack of sales tickets that
she contended represented the totality of her sales for the 2
years in question, and which would total to the lesser amounts
recited above. This information had not been presented to
counsel for respondent prior to trial. To afford counsel the
opportunity to review this information, as well as to meet with
petitioner in hopes that this issue might be resolved or a basis
of settlement might be reached, the Court ordered the trial
recessed for a period of 2 days, after which the case would be
recalled and the trial resumed and closed. Petitioner was
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