Jerry L. Crabtree - Page 20

                                       - 20 -                                         

             Bar Sales                                                                
                  Petitioners attack respondent’s reconstruction of bar               
             sales on four grounds.  First, petitioners assert that                   

                  the revenue agent purportedly used the purchase                     
                  records provided by Jerry Crabtree.  However, the                   
                  volume of alcohol used by the revenue agent in                      
                  her analysis of reconstructing bar sales is                         
                  inconsistent with the volume of alcohol actually                    
                  purchased by the corporate taxpayer.                                

             Petitioners argue that the revenue agent should have used                
             the DABT Summary of Purchases as the starting point to                   
             reconstruct gross receipts from alcohol sales.                           
                  Petitioners claim that the DABT Summary of Purchases                
             shows that Justins purchased 67,712 ounces of liquor (not                
             including wine or beer) during 1992.  Using petitioners’                 
             purchase orders, on the other hand, the revenue agent                    
             determined that Justins purchased 391,294.82 ounces of                   
             liquor during 1992.  Petitioners assert that respondent’s                
             use of Crabtree Investments’ purchase orders rather than                 
             the DABT Summary of Purchases results in an overstatement                
             of 323,582.82 ounces in liquor purchases.  Petitioners do                
             not reconcile this difference or explain why their purchase              
             records reflect purchases that are so much greater than                  
             those reflected in the DABT Summary of Purchases.                        

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