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A. Gross Receipts and Cost of Goods Sold Reported on
Petitioners’ 1995 Schedule C
For the tax year 1995, petitioners reported gross receipts
from Dormer & Louver in the amount of $1,095,339 and claimed cost
of goods sold of $311,578. At trial, petitioner testified that the
$1,095,339 reported on petitioners’ 1995 return as gross receipts
and the $311,578 reported as cost of goods sold were each a
“mistake”. Petitioner further testified “there was no way I could
ever earned a million dollars in sales.” Petitioner, however,
could not substantiate how the $311,578 claimed as cost of goods
sold was calculated. He testified that he provided the accountants
with the business records, checkbook, stubs, and receipts and that
he relied on his accountants in the preparation of the 1995 tax
return. Petitioner asserted that he never looked at the 1995
return; rather, he testified that he “signed it and off it went”.
Statements made on a tax return signed by the taxpayer have
long been considered admissions, and such admissions are binding on
the taxpayer, absent cogent evidence indicating they are wrong.
Waring v. Commissioner, 412 F.2d 800, 801 (3d Cir. 1969), affg.
T.C. Memo. 1968-126; Lare v. Commissioner, 62 T.C. 739, 750 (1974),
affd. without published opinion 521 F.2d 1399 (3d Cir. 1975);
Rankin v. Commissioner, T.C. Memo. 1996-350, affd. 138 F.3d 1286
(9th Cir. 1998).
Other than petitioner’s blanket renunciation of the amount of
gross receipts reported on the return, there is nothing in the
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