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brief that they calculated gross receipts incorrectly or whether
they incorrectly described their method of calculation.
Lastly, because petitioners were cash basis taxpayers, it
would not be surprising to find that the amount reported on a
Form 1099 is different from the total amount of the corresponding
invoices. The Form 1099 amount may be less in situations where
the customer paid only part or some of the invoices. The Form
1099 amount may be greater than the total amount of the
corresponding invoices in situations where the customer paid for
services rendered in prior years. Thus, it is possible, as
petitioners contend, that the discrepancies are due to “timing
considerations”. Petitioners, however, have not provided us with
any records from which we can ascertain the actual relationships
between the Form 1099 amounts and Michael’s plumbing business
receipts for the years in issue.
Accordingly, based on the record as a whole, we conclude
that Michael’s books and records are sufficiently confused so
that they do not reliably show the gross receipts from the
plumbing business, and consequently, Michael’s tax liabilities,
for the years in issue.
(3) Inconsistent and Implausible Explanations
Petitioners attribute a significant portion of their bank
deposits for the years in issue to Michael’s cash hoard.
Respondent maintains that petitioners’ explanations and behavior
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