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Daily Income and Cash Receipt Records
For each business day during the years in issue, Mrs. Karcho
prepared a document entitled “Daily Income Report” that recorded
a dollar figure equal to the amount of cash that Mr. Karcho
deposited into Banner’s bank account for that business day. A
bank receipt for the amount of the deposit for each business day
was also retained. The dollar figure on the “Daily Income
Report”, which was equal to the bank deposit, was substantially
less than the total cash figure recorded on the Meter Readings
Sheet for the same day. In addition, Mrs. Karcho prepared daily
records labeled “Cash Receipts” which listed the daily figure for
the bank deposit (under “Bank Deposit”) and purported to break
this figure down into components, based on the source of the
income, labeled “Arcade Game Income”, “Food & Pop Sales”, as well
as other sales, cash amounts, and receipts. The daily amounts
recorded for “Arcade Game Income” by Mrs. Karcho were
substantially less than the corresponding daily total cash
figures recorded on the Meter Readings Sheets by Mr. Karcho.
With respect to the amounts recorded by Mrs. Karcho as “Food &
Pop Sales”, petitioners have now conceded that these amounts
understated the proceeds from Banner’s sale of food items by
$16,428.50 in the 1987 taxable year, $21,230.90 in 1988,
$14,241.27 in 1989, and $9,269.70 in 1990.
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Last modified: May 25, 2011