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checks dishonored because of insufficient funds. Those records
also show that at the time the checks at issue were written to
cash or Raymond for repayment the account had ample funds. We
find it is more likely than not that the cash deposits were loans
that Raymond made to the buyers group to cover checks that had
been dishonored for insufficient funds, and the checks payable to
cash and to Raymond represent repayment of those loans.
Therefore, we find that the gross receipts for 1991 should be
reduced by $11,320.
D. Adjustments for Deposits and Checks Related to Houlihan/Roth
Transaction
Petitioners also claim that in 1991 Raymond was involved in
a transaction between his friend John Houlihan (John), John's
brother Dave Houlihan (Dave), Jeff Roth (Jeff), and Jeff's
girlfriend Debra Bradley (Debra). Petitioners claim that as a
result of that transaction the gross receipts for 1991 should be
reduced by $27,175 or, in the alternative, the cost of goods sold
should be increased by that amount. John owns two shops in the
Boston area.
Petitioners claim that cash deposited into the Ameritrust
account belonged to John (totaling $23,075) and Dave (totaling
$4,000), and the checks written to Debra (totaling $27,175), John
(totaling $26,014), and Dave (totaling $4,000) are part of the
same transaction as follows:
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