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1995 net profit [10]$793,881.00
divided [by] net profit percentage 13.83%
Gross Proft [sic] [10]$5,740,282.00
(q) Based on total sales of $5,799,767.00 as
reported by Marvin L. Barmes on the Indiana State Form
11405, Business Tangible Personal Property Assessment
Return, for the calendar year ended December 31, 1995,
and utilizing the net profit margin determined by
respondent of 13.83 percent, net profit for from [sic]
the operation of Barbara’s Gift Shop and Barmes Whole-
sale for the tax year ended December 31, 1995 was
$802,108.00.
(r) The Sandbar Wholesale Trust is a mere sham
for tax purposes and should be disregarded.
(s) The taxable income attributed by petitioners
to the Sandbar Wholesale Trust for tax year 1995 is
taxable to petitioners for the taxable year ended
December 31, 1995.
Where, as here, there is a failure to comply with an Order
of the Court with respect to discovery, we may impose such
sanctions as we deem appropriate. See Rule 104(c); Durovic v.
Commissioner, 84 T.C. 101, 119 (1985); Marcus v. Commissioner, 70
10Par. 7(p) of respondent’s answer shows the 1995 net profit
shown in par. 7(o). As we indicated supra note 9, par. 7(o) of
respondent’s answer contains a mathematical error. As corrected,
the 1995 net profit is $793,836. As corrected, par. 7(p) of
respondent’s answer should read as follows:
(p) Utilizing the net profit percentage based on
total sales from petitioners’ 1994 personal income tax
return of 13.83%, respondent determined petitioner’s
total sales for 1995 to be $5,739,957, as follows:
1995 net profit $ 793,836.00
divided [by] net profit percentage 13.83%
Gross Proft [sic] $5,739,957.00
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