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Travis, an employee of AJF, testified that he could recall hiring
his son, Doug, and a person named Harold. Andrew Davis, another
employee, testified that he had once hired his ex-brother-in-law,
and a "big Indian gentleman" whose name started with a "C" and
was "7 foot tall."
For the reasons stated below, we hold that Ferrentino has
not submitted credible evidence of any cash payments made to
casual labor.
Petitioners have presented no documentation to corroborate
the oral testimony of the above-mentioned witnesses. AJF did not
maintain any records of alleged payees who received cash for
services performed as casual laborers during the 1988, 1989, and
1990 taxable years. AJF did not retain the trip sheets or
delivery manifests which might have verified the existence of
casual labor. AJF did not maintain any lists of names of any
casual laborers, records reflecting casual labor hours worked, or
records of individual earnings in a given year of any casual
laborer. Employment tax returns prepared by Brittain did not
show casual laborers being paid in cash. AJF did not maintain
records of how many alleged casual laborers were paid in cash.
Finally, AJF did not require receipts from alleged casual
laborers when they were paid in cash.
A factor which dilutes the credibility of Ferrentino and
Brittain's testimony is that casual labor was never mentioned
during audit. Revenue Agent Kathleen Oswald, who conducted the
audit of AJF, testified that neither Ferrentino nor Brittain had
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