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Respondent determined that petitioners had underreported their
gross receipts for 1992 by $16,403. (Again, respondent did not
consider all deposits to be gross receipts; her revenue agent
backed out loan proceeds, account transfers, and gifts.)
Auto and Truck Expense
Petitioners had three vehicles that they used in conjunction
with their business activities. Petitioners' 1991 Schedule C
shows 28,966 business miles and 4,000 personal miles.
Petitioners did not keep contemporaneous logs of business miles
driven; the mileage numbers on their tax returns were estimates.
At the time of the audit, petitioners reconstructed their
business mileage for 1991. Respondent accepted petitioners'
reconstruction and allowed 25,600 business miles for 1991.
At the time their case was heard by an IRS Appeals officer,
petitioners reconstructed their 1991 mileage to reflect a total
of 29,560 business miles. In their trial memorandum to this
Court, petitioners reconstructed their 1991 mileage to reflect a
total of 36,9204 business miles.
Petitioners' 1992 Schedule C reflects total miles of 38,286
with business miles of 34,786 and personal miles of 3,500. At
the time of the audit, petitioners reconstructed their business
mileage for 1992. Respondent accepted petitioners'
reconstruction of 28,909 business miles for 1992 but deducted
4 Petitioners' exhibit incorrectly totals the miles at
30,320.
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