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petitioner’s omitted income. See supra note 2. The foregoing
books and records deal with the amount of petitioner’s receipts;
as indicated supra, we believe the flaws in those books and
records justify respondent in reconstructing petitioner’s income.
The Purchase Logs deal with petitioner’s costs. Although we have
noticed flaws in these books and records as well, neither party
challenges the overall accuracy or usefulness of this cost
information. However, the Purchase Logs in the record herein
cover less than half of petitioner’s fiscal 1990.
We proceed, then, to evaluate respondent’s reconstruction,
the centerpiece of which is the report and testimony of Trilby
Lundberg.
2. Reconstruction
Respondent reconstructed petitioner’s diesel fuel gross
income by making adjustments to gross receipts and cost of goods
sold. We consider the elements of these items in the following
order: (a) number of gallons sold, (b) sale price per gallon,
and (c) number and price of gallons bought.
(a) Number of Gallons Sold. We conclude that of the
different records of diesel fuel sales that petitioner
maintained, the MIR’s have the greatest appearance of correctness
as to the number of gallons sold. Respondent chose to use the
MIR’s. Petitioner has not persuaded us that there is a better
alternative.
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