- 35 -
Petitioners did not provide a copy of the ad and did not ask
Morova to substantiate the expense. Petitioners failed to
provide any evidence to corroborate that the $300 check was for
an advertisement. Therefore, petitioners' income is not reduced
by $300.
e. Jim Mitchell
Jim Mitchell operates Ontario Hobby Dealers Supply. The
$4,000 check paid to Mr. Mitchell was for the purchase of "close-
outs". We find that the purchase of $4,000 worth of close-outs
more likely than not was a purchase for the buyers group.
Therefore, the cost of goods sold for 1991 should be increased by
$4,000.
f. Anna Fox
Raymond claims that the $1,077 check written to Anna Fox was
for a purchase of a baseball signed by Babe Ruth, Lou Gehrig, Ty
Cobb, and Colonel Jacobs for Davey's Cards. He further claims
that the ball was stolen, and Morova did not pay Raymond for the
ball.
Although Morova testified at trial, he was never questioned
about the baseball. Petitioners have failed to substantiate that
the cost of goods sold should be increased for the $1,077 paid to
Anna Fox.
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