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petitioners in fact purchased the goods with varying list prices
at varying costs. Examining a sample of the invoices from 1992
and 1993, the markup percentage varied for each product as
follows:
Markup percentage
Batteries 54-63%
Cleaning kits 70%
Blank cassette tapes 66-72%
Records 55%
Cassette singles 75%
Maxicassette 55-94%
Cassettes 53-92%
Compact discs 36-66%
The markup percentage of 66.5 percent used by respondent in
both 1992 and 1993 is consistent with the sample invoices we
examined. Petitioners have not shown that the markup percentage
was otherwise. Thus, we find that petitioners have failed to
meet their burden of proof in regard to 1993, and that respondent
has met his burden for the increased deficiency in 1992. We hold
that petitioners had gross receipts of $48,677 in 1992 and
$102,000 in 1993.
Issue 5. Section 6662(a) Accuracy-Related Penalties
Respondent determined that petitioners are liable for
accuracy-related penalties for 1992 and 1993 under section
6662(a) because the underpayments of income tax for those years
were attributable to negligence. Petitioners contend that they
are not liable for the accuracy-related penalties for either
year.
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