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The foregoing Daily Income and Cash Receipts records were
provided by petitioners to their accountant for purposes of
preparing Banner’s Federal income tax returns covering each of
the years in issue. The returns reported Banner’s gross receipts
as equal to the amounts deposited into Banner’s bank account.
Reconciliation Sheets
Petitioners maintained another set of records during the
years in issue, also labeled “Daily Income Report”. These
records, which for the sake of clarity we shall refer to as the
Reconciliation Sheets, generally contained entries, for each
business day, under headings labeled “Daily Income”, “Deposit”,
“Part-Time”, and “Net Income”. In contrast with the “Daily
Income” figures recorded on the Daily Income Report/Cash Receipts
records described above, which treated the day’s bank deposit as
equal to “Daily Income”, the entries under “Daily Income” on the
Reconciliation Sheets generally match the total cash figure from
the Meter Readings Sheet for the same day. The entries under
“Deposit” generally match the day’s bank deposit. The entries
under “Net Income” reflect the difference; i.e., the amount by
which the “Daily Income” entry exceeded the “Deposit” entry, less
any amount entered under “Part-Time” (which only occasionally
contained an entry).
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Last modified: May 25, 2011