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agree with respondent that for 1987 and 1988, no such adjustment
would be reasonable, because Banner deducted amounts for wages in
those years and the record does not indicate whether these
amounts were paid by cash or check. With respect to 1991, we do
not believe any offset is appropriate because the reconstruction
of gross receipts for that year is obviously incomplete. That
is, there were no Meter Readings Sheets for the last 2 months of
fiscal year 1991 and no food sales records for the entire year;
as a consequence, respondent did not determine any additional
gross receipts from those sources for those periods.
Accordingly, we sustain respondent’s determination that
petitioners had unreported income from Banner of $143,552 for
1987, $149,458 for 1988, and $21,603 for 1991. We further hold
that petitioners had unreported income from Banner of $131,686
for 1989 (i.e., respondent’s reconstruction of $160,600 less an
offset of $28,914 for wages paid with unreported cash) and
$109,566 for 1990 (i.e., respondent’s reconstruction of $137,976
less an offset of $28,410 for wages paid with unreported cash).
9(...continued)
Sheets for Banner’s fiscal year ended Feb. 28, 1990, in the
record.
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