- 12 -
Throughout the years in issue, the bar at Justins sold
beer for $2 per bottle, draft beer in 10-ounce glasses for
$2 per draft, and liquor for $3, $3.25, and $3.50 per
drink, depending on the type of liquor used. Mixer liquors
increased the drink price by 25 cents. Justins also sold
liquor, wine, and beer from the package store.
Petitioners kept no record of the number of drinks
given away and did not keep records of broken bottles or
spilled drinks. During the initial audit interview,
Mr. Crabtree informed the revenue agent that there was very
little spillage of alcohol at the bar. In reconstructing
bar sales of liquor, the agent used a 10-percent spillage
or waste factor, and in reconstructing bar sales of draft
beer the agent used a 5-percent spillage or waste factor.
During the initial audit interview, petitioners told
the revenue agent that the drinks sold in the bar contained
approximately 1 ounce of liquor. This is consistent with
the practice of many other bars in the area. The revenue
agent multiplied the number of liter bottles used in the
bar by 33.8 in order to convert liters into ounces. After
reducing the total volume in ounces by the 10-percent
spillage or waste factor and assuming that each drink
contained 1 ounce of liquor, the revenue agent determined
the number of drinks available per bottle. She then
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011