Phillip Vazzana and Estate of Yvonne Vazzana, Deceased, Phllip Vazzana, Executor - Page 6

                                        - 6 -                                         

          1989.  Respondent's additional gross receipts computation was               
          based, in part, on documents (i.e., customer contracts and                  
          illegible checks), which were not probative evidence that V&V               
          received income.  As a result, respondent's computation                     
          overstated V&V's gross receipts by $30,561 for 1988 and $12,121             
          for 1989.  Accordingly, we hold that Messrs. Vazzana and Valenza            
          underreported V&V's gross receipts by $121,289 for 1988 and                 
          $101,029 for 1989.                                                          
          II.  V&V Expenses                                                           
               Petitioners contend that V&V made substantial cash                     
          expenditures to subcontractors for which they did not claim                 
          deductions.  Specifically, they contend that V&V paid J. B.                 
          Johnson, a handyman, $40,000 in 1988 and $36,000 in 1989.                   
          Petitioners have failed, however, to provide any documentation to           
          establish that V&V paid Mr. Johnson such funds.  Mr. Johnson's              
          testimony was contradictory and unpersuasive.  He first stated              
          that he had received the income and reported it on his tax                  
          returns.  He later stated that he did not report the income, had            
          no records of receiving such income, and may not have received              
          the amounts petitioners contend V&V paid him.                               
               Petitioners contend that V&V paid Frank Schmitt, a                     
          carpenter, $9,320 in 1988 and $11,960 in 1989.  Mr. Schmitt                 
          testified that he received these amounts and reported them as               
          income on his Federal income tax returns.  Petitioners provided             





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011