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respondent was not justified in reconstructing petitioner’s gross
receipts using the Lundberg Study, described infra, (2) the
evidence and testimony provided by petitioner are inadequate to
establish the amount of petitioner’s gross income from the sale
of diesel fuel, and (3) respondent’s calculations (after
concessions noted supra note 2) are supported by the evidence.
We agree, in general, with respondent.
A. Preliminary
Both sides agree that, during petitioner’s fiscal 1990,
petitioner (1) sold diesel fuel and gasoline and (2) operated, at
its truck stop, a minimart and a coffee shop. Petitioner’s
fiscal 1990 tax return does not identify any income or deduction
items as being related to a specific one of the foregoing
activities. The parties have stipulated that the notice of
deficiency adjustments for sales and cost of goods relate “solely
to * * * diesel fuel.” They also have stipulated to a profit and
loss statement that breaks down gross receipts and cost of goods
sold among the foregoing activities. Under the circumstances, we
have interpreted petitioner’s tax return and respondent’s notice
of deficiency as dealing with the amounts shown as “sales diesel”
and “purch. diesel fuel” on the stipulated June 1990 PLS.
Respondent does not dispute the correctness of the gross receipts
and cost of goods sold of any nondiesel activity shown on the
stipulated PLS’s. See supra note 2.
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