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activities, record the bill on a ledger, and write a check
to pay the amount due. Petitioners introduced one page of
their 1987 ledger and all pages of their 1988 ledger into
evidence. There is no documentary evidence in the record
of petitioners' bookkeeping practices for the remainder of
1987 or any portion of 1989 through 1991.
Petitioners conceded at trial that check No. 1004
drawn on RC's Chemical account and made payable to Chapman
Nursery & Landscaping in the amount of $2,250, which was
entered into their 1987 cash disbursements journal as a
"farm expense", was actually a personal expense incurred
for landscaping around their house. Petitioners also
conceded that check Nos. 1134 and 1215 drawn on RC's
Chemical account and made payable to Brian Minto in the
amounts of $455.68 and $309.62, respectively, which were
entered in petitioners' ledger as farm expenses for 1988,
were actually used to pay personal expenses.
Respondent's Examination
In May 1990, Revenue Agent Paul Przytulski visited
petitioners' property in conjunction with his audit of
their 1987 and 1988 returns. During this visit,
Mr. Przytulski noticed many deer tracks on the property,
several wooden boxes near the ponds which contained some
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