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as gross receipts because those totals reflect the amounts due
for work done, not the amounts received for the work. As such,
Sandra’s computational error in adding together the invoices for
1995 is irrelevant to the determination of the amount that should
have been reported on the Schedule C. Nevertheless, this error
in bookkeeping suggests that petitioners’ records for the years
in issue are insufficient to show Michael’s tax liabilities.
Secondly, petitioners, for the first time on answering
brief, appear to argue that the adding machine tape totals
represent the amounts received by the plumbing business, not the
total amount of the invoices. In response to respondent’s
proposed finding of fact that Sandra understated, by a total of
$8,683, the amounts of four invoices shown on the adding machine
tapes, petitioners claim that they did not have to report that
$8,683 because they did not receive it. If petitioners did not
receive the $8,683 in 1995, then they are correct that Michael
was not required to report that amount on the Schedule C.
However, as stated above, Sandra testified that she calculated
gross receipts by adding together the invoices, not the receipts.
And the parties stipulated that Sandra provided to the revenue
agent copies of the adding machine tapes along with the invoices
used to calculate gross receipts for the plumbing business. We
do not know whether petitioners did not realize until answering
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