- 9 -
for each .750-liter bottle, 1.5-liter bottle,7 and 3-liter
bottle8 and an allowance of 40 percent for each liter bottle.
Gross receipts from the sale of liquor were calculated using 16
percent as the discretionary use allowance.
Petitioner kept no record of the number of beer, wine, or
liquor drinks given away, and he did not keep records of broken
or spilled drinks (beer, wine, or liquor).
4. Reconstructed Gross Receipts
In the deficiency notice, mailed on April 1, 1996,
respondent determined that petitioner had gross receipts for
1987, 1988, 1989, and 1990 in the amounts of $256,344, $242,740,
$249,378, and $199,199, respectively. Respondent's computations,
as stipulated by the parties,9 indicate reconstructed gross
receipts from the sale of draft beer, bottled beer, canned beer,
wine, and liquor in the amounts of $204,076.50 for 1987,
$209,167.85 for 1988, $223,325.45 for 1989, and $150,639.60 for
7 Each 1.5-liter bottle of wine contains the equivalent of two
.750-liter bottles.
8 Each 3-liter bottle of wine contains the equivalent of four
.750-liter bottles.
9 Calculations were stipulated for trial, for respondent and
petitioner, respectively, solely for the purpose of showing how
the parties calculated gross receipts. Neither party stipulated
the accuracy, correctness, or reasonableness of the other party's
calculations.
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