Dharma Enterprises - Page 14

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          which oversees and coordinates the activities of the various                
          Nyingma organizations.  Two directors, including Maitland, had              
          taught skillful means classes at the Nyingma Institute and served           
          as its dean.                                                                
               Petitioner's market for its commercial printing business,              
          with the exception of the Amber Lotus division, encompassed the             
          greater San Francisco Bay Area.  It did not advertise its                   
          commercial printing business and primarily relied on customer               
          referrals and cold calls to obtain new customers.  Petitioner had           
          a reputation as a high-quality, low-priced printer that provided            
          good customer service.  Petitioner's Amber Lotus division                   
          advertised through a variety of methods.  The Amber Lotus                   
          division accounted for approximately 7 percent of petitioner's              
          gross sales during the years in issue.  Amber Lotus was started             
          by DM in 1986.                                                              
               In taxable year 1991, petitioner reported gross sales of               
          $6,239,139 on its tax return.  Respondent determined that                   
          petitioner underreported its gross sales by $8,301.  Petitioner             
          concedes an increase in its gross sales of $1,206.  Petitioner              
          reported gross sales of $7,095 less than reflected on its books             
          and records because petitioner double counted sales on its books            
          and records by this amount.  Petitioner had issued two invoices             
          to a customer for the same print job and recorded both invoices             
          as gross sales on its books and records.  The customer paid both            
          invoices and then informed petitioner about the overbilling.                



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