- 10 - Automobile Expenses Petitioners maintain that they are entitled to deduct $1,581 in unreimbursed automobile expenses incurred during 1991 in connection with Classic Pub's operation. These expenses were not claimed on their tax return. Notice of Deficiency In the notice of deficiency mailed to petitioners regarding their 1991, 1992, and 1993 tax years, respondent revised petitioners' allowable losses and income from Classic Pub, as described above. Respondent also determined a section 6662(a) accuracy-related penalty for each of the years in issue. OPINION Issue 1. Determination of Classic Pub's Gross Sales The primary issue before us is whether petitioners had unreported income arising from Classic Pub during the years in issue. In resolving this issue, we must determine whether Revenue Agent Bixler's use of the percentage markup method in reconstructing Classic Pub's gross sales was proper and whether discounts4 he applied in computing the amount of sales of discounted mixed drinks, wine, and beer were correct. 4 A higher discount percentage for items sold at discounted prices benefits petitioners because it results in lower total gross sales.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011