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Petitioner introduced a printout from a friend's taximeter
that he contends shows his method of calculating his gross
receipts. Petitioner, however, failed to present any like
printouts from the taximeters of his own taxicabs. We find that
petitioner failed to maintain adequate records of his gross
receipts for 1992 and 1993.
Since petitioner failed to maintain records that clearly
reflected his income, respondent's revenue agent, Tony Savage,
reconstructed petitioner's gross receipts for 1992 and 1993
through a method called the "cab formula". Mr. Savage works in
respondent's market specialization program that deals with the
transportation industry (including taxicab drivers) and has used
the cab formula on numerous occasions with other taxicab drivers.
As explained by Mr. Savage, the cab formula reconstructs
income by taking into account the claimed gas expenses, price per
gallon of gas, miles per gallon of the vehicle(s) used, occupancy
rate of the vehicle, number of customers and trips per day,
number of days worked per year, and amounts charged for both
entry and per mile fares. Mr. Savage testified that he relied in
part on petitioner's statements during the audit, but necessarily
estimated some factors through the use of similar information
from other taxicab drivers who, unlike petitioner, had provided
him with records.
Mr. Savage testified that he used conservative numbers in
reconstructing petitioner's gross receipts. In particular, he
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