- 5 -
Further, he did not provide adequate records to reconcile coupon
and buy-down reimbursement payments with amounts reported as
coupon and buy-down income.
The revenue agent used records she requested and received
directly from cigarette manufacturers in an attempt to reconcile
the $777,848 coupon and buy-down income total with associated
payments received from cigarette manufacturers. Some cigarette
manufacturers provided summary schedules of buy-down payments
made to petitioner. Others provided copies of buy-down checks
sent to petitioner. Many of the records the revenue agent
received were incomplete and/or inaccurate, and the revenue agent
was unable to reconcile petitioner’s return to the available
records. As a result, respondent determined that petitioner’s
coupon and buy-down income was $777,848 and therefore understated
by $124,684.
Petitioner reported $16,736 in promotional income on his
1997 Federal income tax return consisting of $11,284 in “rack and
promotional income”, and $5,452 of “8 cent coupon” income
reimbursement payments from cigarette manufacturers for the cost
of mailing paper coupons. The summary worksheets provided by
petitioner reflected total rack and promotional income of
$63,940. Additional documents revealed that petitioner received
$5,452 in “8 cent coupon” income and $523 in postage income.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011