Mary Ann and Wilson R. Collins - Page 5

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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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