Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-01574/USCOURTS-ca10-87-01574-0/pdf.json

Parties Involved:
Commissioner of Internal Revenue
Appellee
G. N. Farrow
Appellant
Louise W. Farrow
Appellant

Document Text:

FILED 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

United Stat.es Court of Appeals 

Tenth Circuit 

MAR 1 71989 

ROBERT L. HOECKER 

Clerk G. N. FARROW, and 

LOUISE W. FARROW, 

Petitioners-Appellants, 

v. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent-Appellee. 

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ORDER AND JUDGMENT* 

No. 87-1574 

(T.C. No. 11788-80) 

Before ANDERSON, MCWILLIAMS, AND TACHA, Circuit Judges. 

This appeal is from a decision of the tax court determining 

deficiencies for taxpayers G.N. and Louise w. Farrow in their 

1970, 1973, and 1974 taxes. The Farrows appeal on the grounds 

that the deficiencies assessed by the tax court were in error 

because they were based on an underestimation of the cost of goods 

sold in the Farrows' equipment repair and sales business resulting 

in an over-calculation of the amount of income upon which tax was 

due. The taxpayers argue that the cost of goods sold should be 

based upon an extrapolation of manufacturers' bonus plans or upon 

an average profit margin in the industry. The tax court instead 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 87-1574 Document: 010110034936 Date Filed: 03/17/1989 Page: 1 
relied upon actual records submitted by the taxpayers and upon 

reconstructions of the bank accounts, records, and transactions of 

the taxpayers. We cannot say that the reliance of the tax court 

upon actual records of the taxpayers is clearly erroneous and 

AFFIRM . 

ENTERED FOR THE COURT 

Deanell Reece Tacha 

Circuit Judge 

Appellate Case: 87-1574 Document: 010110034936 Date Filed: 03/17/1989 Page: 2