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bar cash register tapes were duplicated on the dinner cash
register tapes, thus accounting for the “double-ups” theory upon
which petitioner relied to invalidate respondent’s determination
of $120,371 of unreported income.
In following Mr. Chiate’s leading questions, Mr. Ozenne
testified that by analyzing the restaurant’s records from periods
other than the applicable period (June 1994 through May 31, 1995)
he could prove that the “$120,000” unreported income could be
accounted for by showing that there were “double-ups” on the bar
and dinner cash register tapes.
Mr. Ozenne explained the basis for his double-ups theory as
follows:
Well, what I did, if you take the IRS’s proposed
adjustment of $120,000 and you divide by 365 days,
because they were open every day except Christmas and
Thanksgiving, you get an average of $328. So our
contention is that approximately $328 worth of drinks
every day were added to tape two (2) and to tape one
(1) which are double counted.
Having computed the amount of $328 as the base figure needed
to arrive at $120,000,3 Mr. Ozenne then incredibly explained how
he arrived at a $328 day double-up:
What we did initially is we took the day of July
2nd and we added up all the double counts on that one
and it came to $183. Because that was a small group of
3 To be more accurate, Mr. Ozenne should have divided
$120,000 by 363 days because the restaurant was closed on
Christmas and Thanksgiving Day. He would then have a base figure
of $331 to work with, but the Court is confident the discrepancy
would not have slowed Mr. Ozenne down.
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