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during Andy’s lawsuit, petitioner changed its methodology for
reporting sales and at that time Steve began giving the fuel pump
computer tapes to Roberts. Before petitioner changed its method
for reporting sales, Roberts asked Steve for the fuel pump
computer tapes and was told by Steve that these tapes had been
destroyed.
Roberts represented petitioner in the audit of petitioner’s
fiscal 1990 income tax, hereinafter sometimes referred to as the
income tax audit. The income tax audit began around mid-1992.
During the income tax audit, Roberts gave petitioner’s
bookkeeping records to respondent and met with a revenue agent
two or three times. During the income tax audit, the revenue
agent gave to Roberts a form that asked, among other things, how
many gallons of diesel fuel petitioner sold each month. Roberts
gave the form to Steve. Steve responded that petitioner sold
200,000 gallons per month.
B. Monthly Inventory Reconciliation Sheets
Petitioner’s records include Monthly Inventory
Reconciliation sheets, hereinafter sometimes referred to as
MIR’s, which petitioner used to track diesel fuel inventory.
Petitioner’s records include a MIR for each month from July 1989
through June 1990, except for December 1989. Each MIR includes
columns for opening inventory, deliveries, closing inventory by
dipstick reading, metered sales, and accumulated metered sales.
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