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any evidence in these records that substantiates petitioners’
claimed additional deductions. Also, nothing in the record
provides a basis for estimating the claimed deductions. We shall
address each deduction claimed by petitioners, and petitioners’
alternative argument, which claims deductions based upon
statistical data.
1. Additional Wages
Respondent concedes that Sam Kong Fashions incurred
additional cash wage expenses, but argues that petitioners failed
to provide enough specificity to estimate these additional
expenses. However, respondent does not dispute that cash
payments of $10,000 in 1994 and 1995 were made to Bi Ling Wu, an
employee of Sam Kong Fashions.13 Respondent also does not
dispute that another employee, Wan Zi Chen, was paid both in cash
and by check. Wan Zi Chen received cash payments of $440 per
week, or $22,880 per year, in 1994 and 1995.14 We find that Sam
Kong Fashions is entitled to deduct these payments in addition to
13 Petitioners’ request for findings of fact states: “Bi
Ling Wu was paid approximately $10,000 in 1994 and $10,000 in
1995 in cash.” In response to this requested finding of fact,
respondent stated that he had “No objection.”
14 Petitioners’ request for findings of fact states: “In
1994 and 1995 Sam Kong or Sam Kong Fashions, Inc. paid Wan Zi
Chen, a manager, $2,400 a month, consisting of $160 in check and
$2,240 in cash.” Respondent objected to this requested finding
of fact “because it is not supported by the record. Respondent
proposes an alternative finding of fact that Ms. Zi Chen was paid
a total of $2,400.00 per month consisting of $160.00 per week by
check and $440.00 per week in cash.”
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