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the amount of salaries and wages deducted on the corporate
returns.
With respect to the other alleged cash wage payments, the
evidence is insufficient for us to estimate these amounts.
Although petitioners offered timecards as evidence that Sam Kong
Fashions incurred additional wage expenses, we do not think that
these records provide a sufficient basis for estimating cash wage
expenses of the corporation. Petitioners offered the timecards
for only a few months in 1995. The sums listed on the timecards
do not indicate whether an employee was paid in cash or by check.
The timecards state that they are for “Shun Wo Fashions Inc.”,
and these records do not contain any discernable reference to Sam
Kong Fashions. We find that these records fail to establish the
number of employees, the amount of cash that its employees were
paid, or the number of hours that these employees worked. Mr.
Kong, who was in charge of the business, chose not to testify.
Because there is no credible evidence to support petitioners’
estimated cash wage expenses, we find that they are not entitled
to additional deductions for these expenses.
2. Thread Expense in 1994
Petitioners also failed to present credible evidence to
support the claimed expense of $40,000 to $50,000 for thread in
1994. Although Sam Kong Fashions failed to claim this deduction
on its 1994 corporate income tax return, it did report an expense
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