Harry Allen and Evelyn Scott Hall - Page 4

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          Government.  Under an agreement with ARL, Mr. Hall transported              
          Government freight across the United States as an independent               
          owner/operator.                                                             
               ARL sent Mr. Hall weekly settlement statements.  Each                  
          statement consisted of a “permanent check voucher” and a                    
          “settlement voucher,” which listed the income Mr. Hall had earned           
          on his trips for ARL, as well as any deductible charges he had              
          incurred during that week.  The charges included rent due on the            
          trailer and other expenses advanced by ARL, such as truck tags              
          needed to cross into various States, taxes, and expenses with               
          respect to use of the leased trailer.  Mr. Hall was obligated to            
          repay such expenses.  Each item of income and expense was                   
          enumerated.  In the audit of their return by respondent,                    
          petitioners provided roughly two-thirds of the weekly statements            
          for the year at issue.  These statements were produced at trial.            
          Other statements were either misplaced or lost.                             
               On the lower portion of each weekly settlement statement               
          were figures entitled, “YTD Amount” and “YTD 1099”.  These                  
          figures suggested a running total, as they tended to increase               
          with each later statement.  However, some statements contained              
          the designation, “N/A,” in the “YTD Amount” or “YTD 1099" column.           
          The last statement for the year, dated December 21, 2000, showed            
          a “YTD Amount” of $54,197.69 and a “YTD 1099" of $43,983.72.                
               During the course of the year, Mr. Hall noticed that his               





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