Ronald L. Heidrick - Page 6




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          the same local jeweler but kept no receipts to document the                 
          transactions.                                                               
               During the years at issue, petitioner kept a calendar that             
          contained notations of his mileage, location, dates worked at the           
          gold mining activity, and some expenditures.  He wrote “San                 
          Andreas”, “cement plant”, or other notations on days he was                 
          dredging or tending to his equipment.  These calendars indicate             
          that petitioner worked approximately 39 days during 1994 and 37             
          days during 1995 either dredging for gold or working at home on             
          his gold dredging equipment.  No calendar for 1996 was introduced           
          into evidence, nor was any testimony offered as to how much time            
          petitioner spent on his activity that year.                                 
               With respect to expenses incurred in the gold mining                   
          activity, petitioner did not keep a general ledger or other                 
          formal records.  He kept some store receipts and canceled checks            
          for items purchased for the mining operation and had photographs            
          of his dredging and gold mining equipment.  Other expenses and              
          items, such as mileage, were documented only by notations on                
          petitioner’s calendar or using receipts handwritten by petitioner           
          or acquaintances who had sold petitioner pieces of equipment.  At           
          least some of these homemade receipts were not prepared                     
          contemporaneously with the transactions.  Rather, petitioner                
          admitted that he took inventory and gathered his receipts in 1997           







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