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savings of capital from prior years, not unreported current-year
sales of Cal Ben.
Petitioners' arguments are not persuasive.
We first note that the unreported sales of Cal Ben for each
of the years in issue reflect figures substantially higher than
the claimed additional business expenses of Cal Ben. Thus, even
if the claimed additional business expenses of Cal Ben were
allowed, the net profits of Cal Ben (and petitioners’
underreported taxable income relating thereto) would still be
substantial.
Evidence as to average profit margins of other businesses
does not overcome, in this case, the evidence that establishes
Cal Ben’s unreported sales and the lack of any credible evidence
that establishes Cal Ben’s entitlement to additional business
expenses.
General survey information regarding other businesses does
not, in this case, provide a credible basis for allowing Cal Ben
additional business expenses. The survey information is general.
It does not purport to represent information on companies
comparable to Cal Ben. It raises no doubt in our mind as to the
underreporting of significant sales and partnership income that
occurred on Cal Ben’s partnership tax returns and the
underreporting of petitioner's income that occurred on
petitioners’ Federal income tax returns.
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