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income and claimed losses relating to his filament tape
endeavors:
Sch. C
Sch. C Cost of
Wage Sch. C Returns & Goods Sold/ Sch. C
Year Income Gross Rec. Allowances Expenses1 Loss
1991 $38,468 $ 4,297 $37,683 - 0 - ($33,386)
1992 37,192 12,162 29,478 $19,330 ( 36,646)
1993 38,204 6,417 45,243 6,031 ( 32,795)
1994 41,989 9,273 23,172 22,637 ( 36,536)
_______________
1 For the 1992 and 1993 years this figure represents only
the amounts claimed as cost of goods sold. No expenses were
claimed on the Schedules C attached to these returns. The figure
for the 1994 tax year comprises $20,527 for cost of goods sold
and $2,110 in expenses.
Petitioner testified that from time to time over a number of
years he attempted to dispose of his defective tape inventory.
He testified that "so what I went through this whole period of
time was trying to get somebody who would take some of it, any of
it or all of it". But since the record is rather muddied, it is
not clear that petitioner actually ever sold any of the tape.
Petitioner does not attempt to explain how Schedule C
returns and allowances could exceed Schedule C gross receipts,
particularly in each year over a 4-year period as reflected on
the above table. Throughout 1993 and for 5 years before that,
petitioner was employed by the State of California as a payroll
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