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determined, and the parties agree, that petitioner’s costs of
purchases exceeded reported receipts. For 1993, petitioner's
reported receipts from auto service and repairs, including the
sale of parts and fluids (e.g., oil, coolant, brake fluid, etc.),
totaled $23,688 whereas his cost of purchases for these items
totaled $69,493.1 Similarly, his reported receipts from the sale
of chips, candy, soft drinks, and tobacco totaled $6,658 whereas
his cost of purchases for these items totaled $8,686. For 1994,
reported receipts from the first category totaled $6,348 whereas
cost of purchases totaled $41,209. In the second category,
reported receipts were $2,744 whereas cost of purchases totaled
$3,939.
Petitioner has the burden of proof. See Rule 142. We found
petitioner to be a credible witness, and we find that he has
carried his burden of proof with respect to some of the issues
before us.
Chips, Candy, Soft Drinks, and Tobacco
With respect to chips, candy, soft drinks, and tobacco, we
sustain respondent’s determinations. For these items, respondent
applied a markup of 25 percent, which was determined using (1)
1 The parties' stipulation incorrectly states that these
figures were $83,402 and $101,073, respectively, for 1993. The
other evidence in the record makes clear that the foregoing
figures were the correct figures for 1992, not 1993. The Court
may disregard a stipulation where it is clearly contrary to the
evidence in the record, and we do so here. See Cal-Maine Foods,
Inc. v. Commissioner, 93 T.C. 181, 195-196 (1989).
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