- 12 -
First, to rebut the adverse inferences that might be drawn
from the fact that Mr. Parsons often took cash from Cedar Hill’s
proceeds without recording it on the pink sheets as a personal
draw, petitioners contend that they understood the pink sheets to
function merely as a “snapshot” of the day’s business activity,
so that cash removed after the business day need not be reflected
on the pink sheets. Thus, the argument goes, Mr. Parsons
recorded cash he withdrew for personal use from the registers
during business hours but did not believe it was necessary to
record cash taken on the following day before Cedar Hill’s
proceeds were deposited into its bank account. Besides finding
it implausible that a college-educated, successful businessman
could believe this, we note that petitioners’ own actions are
inconsistent with this explanation. Mrs. Parsons testified that
she would on occasion remove cash for petitioners’ personal use
in the evenings at home when she was performing her bookkeeping
tasks for Cedar Hill, and that these withdrawals were recorded as
personal draws on the pink sheets. If petitioners believed the
pink sheets were to function only as a “snapshot” of the business
day, Mrs. Parsons’ after-hours withdrawals would not need to be
recorded.4
4 Petitioners’ “snapshot” theory is also different from the
explanation initially provided by petitioners’ accountant to
respondent’s revenue agent in the course of the audit. As
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011