- 79 -
markups do not support petitioners' contention that the
restaurants could not have underreported their sales.
Only two of the three restaurants in issue during the years
in issue were owned by Toraya. We are persuaded that some
portion of the unreported income is attributable to the
restaurants owned by Toraya and the balance is attributable to
the restaurant owned by the Takaos. The portion attributable to
the sole proprietorship would not be taxable to Toraya.
When we are convinced that some portion of alleged
unreported income was, in fact, chargeable to the taxpayer, we
may estimate the amount of the income even in the absence of
precise records and testimony, bearing heavily upon the taxpayer
who is responsible for the uncertainty. Henry Schwartz Corp. v.
Commissioner, 60 T.C. 728, 744 (1973); see Llorente v.
Commissioner, 74 T.C. 260, 268 (1980), affd. in part, revd. in
part on other grounds and remanded 649 F.2d 152 (2d Cir. 1981).
Here, the restaurants all operated under the "Toraya" name,
and they all served Japanese food. We find that the unreported
income should be allocated to each restaurant on the basis of the
18(...continued)
Adjusted
gross
profit 912,714 721,208 561,175 499,531
Purchases
markup 196% 203% 197% 201%
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