Charles Shaw - Page 18

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          than respondent determined for that year.  Respondent does not              
          meet this burden by pointing out gaps in petitioner’s proof.  In            
          calculating petitioner’s costs of goods sold, respondent did not            
          account for any payments to The Hipage Co., Inc., Southern Export           
          Services, Bizehen, Shanghai Shen, Boxter Customer Service, Sam’s            
          Club, Jefferson Variety Store, and Kuang-Yu Wen in 1993-95,                 
          despite the fact that these are companies with which Far Eastern            
          did business during the years in issue.  Williams did not obtain            
          canceled checks from petitioner’s bank accounts for the years in            
          issue because they were numerous and he thought that his                    
          supervisor would not approve the cost of copying them.  This                
          suggests that respondent did not count all of petitioner’s costs            
          in calculating petitioner’s costs of goods sold.  Respondent’s              
          apparent failure to account for payments to some of the companies           
          with which Far Eastern did business and respondent’s failure to             
          obtain petitioner’s checks casts doubt on respondent’s contention           
          that petitioner’s costs of goods sold is less than respondent               
          determined.                                                                 
               Respondent has not shown that petitioner’s costs of goods              
          sold were less than respondent determined.                                  
                    e.   Conclusion                                                   
               We conclude that, because neither party has proven                     
          otherwise, petitioner had costs of goods sold as respondent                 







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