James E. and Chung H. Peacock - Page 10

                                        -10-                                          
          kept half of the gross receipts or that petitioners did not                 
          report all of their gross receipts to her.                                  
               Petitioner-husband signed, and directed each masseuse to               
          sign, papers showing that masseuses were paid about $200 a week.            
          Petitioner-husband told the masseuses to give those payroll                 
          papers to Amoroso.  Petitioners issued Forms W-2 showing that               
          each masseuse earned substantially less than petitioners knew               
          they earned.  Petitioners withheld a fixed amount of taxes from             
          the masseuses regardless of the amount they earned.                         
          D.   The Daily Sheets Kil Lee Gave to Respondent                            
               In November 1987, Kil Lee found four sets of daily sheets              
          that he had not burned and gave them to respondent.  Those daily            
          sheets show the following:                                                  
                                 Number   Number of                                   
          Tokyo Sauna    Dates        of days  masseuses    Gross receipts            
          Joplin         10/29/83-      35        5         $42,696                   
                         12/2/83                                                      
          Springfield    10/29/83-      35        5         39,030                    
                         12/2/83                                                      
          Billings       3/28/87-       28        3         25,700                    
                         4/24/87                                                      
          Springfield    3/28/87-       28        5         50,306                    
                         4/24/87                                                      
          E.   Petitioners' Net Worth                                                 
               1.   Overview                                                          
               Petitioners concede that respondent computed their net worth           
          correctly except for the amount of their cash on hand on December           
          31, 1982, 1983, 1984, 1985, 1986, and 1987.                                 







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