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have either been expressly conceded by either respondent or
petitioners or abandoned by petitioners.
OPINION
Petitioners contend that respondent improperly used the
premium amounts reported to the Oklahoma Insurance Department
rather than using the bank deposits to determine Carter Bonding’s
gross receipts for 1994 and 1995. Petitioners argue that they
collected only approximately 45 percent of the bond premiums
charged, which were the amounts reflected on the face of the
bonds written and the amounts reported to the State authority.
They failed to produce the accounts receivable records that
allegedly supported these contentions, blaming, at various times,
Sullivan and another employee of Carter Bonding. At trial,
Sullivan belatedly produced a handwritten journal of doubtful
authenticity. Based on our observation of the witnesses and
review of the entire record, we cannot accept petitioners’ claim
that the uncollected premiums during the years in issue
approximated $65,000 in 1994 and $100,000 in 1995.
Respondent was entitled to use the reports filed with the
Oklahoma Insurance Department to reconstruct Carter Bonding’s
income in the absence of adequate books and records. See United
States v. Gosnell, 961 F.2d 1518, 1520 (10th Cir. 1992); Webb v.
Commissioner, 394 F.2d 366, 371-372 (5th Cir. 1968), affg. T.C.
Memo. 1966-81; Meneguzzo v. Commissioner, 43 T.C. 824 (1965).
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