Cheyne v. Commissioner

ROBERT D. CHEYNE AND VIRGINIA CHEYNE, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Cheyne v. Commissioner

Docket No. 1257-76.

United States Tax Court

T.C. Memo 1977-361; 1977 Tax Ct. Memo LEXIS 80; 36 T.C.M. 1439; T.C.M. (RIA) 770361;

October 11, 1977, Filed

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E. J. Ball and Kenneth R. Mourton, for the petitioners.

J. Michael Adcock and Thomas J. Miller, for the respondent.

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DAWSON

MEMORANDUM FINDINGS OF FACT AND OPINION

DAWSON, Judge: Respondent determined the following deficiencies in petitioners' Federal income taxes and additions to tax:

		Addition to Tax
Year	Deficiency	Sec. 6653(b) 1
1964	$ 941.18	$ 470.59
1965	1,150.25	575.13
1966	1,858.15	929.08
1967	2,365.71	1,182.86
1968	4,400.76	2,200.38

Concessions have been made by the parties. The issues presented for decision are:

1. Whether respondent is collaterally estopped from claiming that petitioner Robert D. Cheyne filed false and fraudulent Federal income tax returns for the years 1967 and 1968 because of petitioner's">*82 acquittal under section 7206(1) for the same years.

2. Whether any part of the underpayment of income tax for each of the years 1964 through 1968 was due to fraud with intent to evade tax on the part of petitioner Robert D. Cheyne.

3. Whether the assessment of any deficiencies for the years 1964 through 1968 is barred by the statute of limitations.

4. Whether petitioner Robert D. Cheyne is entitled to deduct certain business expenses not claimed on his Federal income tax returns for the years 1964 through 1968.

5. Whether petitioner Robert D. Cheyne received additional income of $600 for each of the years 1965 through 1968 from the use of an automobile provided by the J. D. Fisher Buick Company.

6. Whether petitioner Robert D. Cheyne received additional income from the use of motel accommodations for the years 1966, 1967, and 1968 in the amount of $350 for each year.

FINDINGS OF FACT

Some of the facts are stipulated. The stipulation of facts and supplemental stipulation of facts, together with the attached exhibits, are incorporated herein by this reference.

Robert D. Cheyne and Virginia Cheyne (petitioners) are husband and wife whose legal residence was">*83 Bentonville, Arkansas, at the time they filed their petition in this case. They filed their joint Federal income tax returns for the taxable years 1964 through 1968 with the Southwest Internal Revenue Service Center at Austin, Texas.

On their joint Federal income tax returns for the years in issue the petitioners stated gross income as follows:

Year	Gross Income
1964	$ 10,748.89
1965	10,706.59
1966	10,621.98
1967	11,522.75
1968	13,153.91

On December 18, 1975, respondent mailed a statutory notice of deficiency to the petitioners covering the deficiencies and additions to tax for the years in issue.

During the years 1964 through 1968 Robert D. Cheyne (hereinafter referred to individually as the petitioner) was employed by the University of Arkansas as Sports Information Director. In that capacity he produced three radio shows designated Razorback Scoreboard Show, Razorback Report Show and Razorback Basketball Report Show. All shows were operated in connection with either the University of Arkansas football or basketball games. The production of the shows was primarily for the information of the sports fans of the University of Arkansas. They were">*84 not designed to produce substantial revenues, but were expected to cover the costs of production. Petitioner operated these shows on a cash basis because they were operated in connection with football or basketball games.

The Razorback Basketball Report Show was a taped pre-game 10-minute show which was taped for each of the University's 24 basketball games during each of the 1967-1968 and 1968-1969 basketball seasons. The 1967-1968 season ran from December 1967 through March 1968 and the 1968-1969 season ran from December 1968 through March 1969.

Some of the radio stations, because of conflicts with high school games, did not carry all of the 24 basketball games on their stations. The charge to each radio station was $5 per basketball game show.

The Razorback Scoreboard Show was a 15-minute live production of University of Arkansas football games broadcast at 4:45 every Saturday afternoon during the football season for each year 1964 through 1968.

The University of Arkansas played 10 football games per season and the charge for the Razorback Scoreboard Show was $5 per station per show.

The Razorback Report Show was a 15-minute taped show appearing three times per week">*85 during the football season on Mondays, Wednesdays, and Fridays, for 10 consecutive weeks consisting of analysis of past games and a preview of upcoming games. The Razorback Report Show was produced during the years 1964 through 1968 and the charge for the show was $4 per show or $12 per station per week.

Petitioner received payments by check for the production of these shows from radio stations throughout Arkansas and surrounding states. None of the amounts received from the radio stations by petitioner in producing the three radio shows were included in his Federal income tax returns for the taxable years 1964 through 1968. The amounts received from radio stations for the three shows were as follows:

Year	Amount
1964	$ 500.00
1965	1,050.00
1966	1,250.00
1967	3,846.00
1968	6,357.00

The following is a schedule which reflects payment made to petitioner by check on the account of KMCW radio for the production of the Raxorback Report Show:

Date	Payee	Check No.	Amount	Endorsement
5-26-68	Razorback Report	173	$80.00	Razorback Report
	Show			Show Bob Cheyne

This amount was received by petitioner. The check was issued">*86 in payment of amount due the listed payee for broadcasting the Razorback Report Show over radio station KMCW. The University of Arkansas did not receive any of the amount paid.

The following is a schedule which reflects payments made to petitioner by check on the account of White River Valley Broadcasters, Inc., for the production of the Razorback Scoreboard Show and Razorback Report Show over radio station KBTA:

Date	Payee	Check No.	Amount	Endorsement
11-13-64	Football Scoreboard	10266	$50.00	Football Scoreboard
	Show			Bob Cheyne
11-27-65	Razorback Score-	1218	50.00	Razorback Scoreboard
	board Show			Bob Cheyne
11-23-66	Razorback Score-	2122	50.00	Razorback Scoreboard
	board Show			Bob Cheyne
7-7-67	Razorback Score-	2687	50.00	Razorback Scoreboard
	board Show			Show Bob Cheyne
10-6-67	Razorback Report	3146	24.00	Razorback Report
	Show			Show Bob Cheyne
11-2-67	Razorback Report	3211	48.00	Razorback Report
	Show			Show Bob Cheyne
11-30-67	Razorback Report	3257	48.00	Razorback Report
	Show			Show Bob Cheyne
10-5-68	Razorback Report	3917	24.00	Razorback Report
	Show			Show Bob Cheyne
11-7-68	Razorback Report	3988	56.00	Razorback Report
	Show			Show Bob Cheyne
11-29-68	Razorback Score-	4030	50.00	Razorback Scoreboard
	board Show			Show Bob Cheyne
11-29-68	Razorback Report	4031	40.00	Razorback Report
	Show			Show Bob Cheyne

">*87 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show and/or Razorback Report Show over radio station KBTA. The University of Arkansas did not receive any of the amounts paid.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station KBRI for the production of the Razorback Scoreboard Show and/or Razorback Report Show:

Date	Payee	Check No.	Amount
12-10-65	Razorback Score-	958	$50.00
	board Show
11-28-66	Razorback Score-	478	50.00
	board Show
10-9-67	Razorback Report	713	24.00
	Show
11-10-67	Razorback Report	Illegible	48.00
	Show
12-7-67	Razorback Report	764	48.00
	Show
12-15-67	Razorback Score-	772	50.00
	board Show
10-9-68	Razorback Report	1031	24.00
	Show
12-9-68	Razorback Score-	1100	50.00
	board Show
12-9-68	Razorback Report	1101	40.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show and/or Razorback Scoreboard Show over radio station">*88 KBRI. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed by Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KAMD radio for the production of the Razorback Scoreboard Show or Razorback Report Show:

Date	Payee	Check No.	Amount
12-2-66	Razorback Score-	18426	$ 50.00
	board Show
10-6-67	Razorback Report	19224	24.00
	Show
11-3-67	Razorback Report	19280	48.00
	Show
12-28-67	Razorback Score-	19411	50.00
	board Show
8-30-68	Razorback Report	20027	120.00
	Show
4-15-68	Razorback Report	19726	48.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KAMD. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station">*89 KJWH for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
11-23-66	Razorback Score-	2504	$50.00
	board Show
12-15-67	Razorback Score-	3470	50.00
	board Show
12-27-68	Razorback Score-	4386	50.00
	board Show

These amounts were received by petitioner. The check was issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KJWH. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station KLYR for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
12-4-64	Football Score-	3819	$50.00
	board Show
8-24-65	Razorback Score-	4173	50.00
	board Show
12-9-66	Razorback Score-	4901	50.00
	board Show
8-8-67	Razorback Report	5327	24.00
	Show
11-6-67	Razorback Report	142	48.00
	Show
12-10-67	Razorback Report	173	48.00
	Show
10-7-68	Razorback Report	5673	24.00
	Show
11-12-68	Razorback Report	299	56.00
	Show
12-9-68	Razorback Score-	313	50.00
	board Show
12-9-68	Razorback Report	312	40.00
	Show

">*90 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KLYR. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KCON radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
11-25-64	Football Score-	2442	$50.00
	board Show
11-23-66	Razorback Score-	3094	50.00
	board Show
12-16-67	Razorback Score-	3649	50.00
	board Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KCON. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KCCB radio for the production of">*91 the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
11-25-65	Razorback Score-	4887	$50.00
	board Show
11-25-66	Razorback Score-	5848	50.00
	board Show
12-23-67	Razorback Score-	6918	50.00
	board Show
12-6-68	Razorback Score-	7841	50.00
	board Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KCCB. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule of amounts paid to petitioner Robert D. Cheyne by radio station KAGH for the production of the Razorback Report Show, Razorback Scoreboard Show, or Razorback Basketball Report Show:

Show	Amount Paid	Year Received
Razorback Scoreboard	$50.00	1968
Show
Razorback Basketball	55.00	1968
Report Show
Razorback Basketball	65.00	1968
Report Show
Razorback Report Show	24.00	1968

The amounts were paid as indicated above and the University of Arkansas did not receive any of the amounts paid.

The following is a schedule">*92 which reflects payment made to petitioner by check on the account of radio station KDEW for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-11-68	Razorback Score-	569	$50.00
	board Show

This amount was received by petitioner. The check was issued in payment of the amount due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KDEW. The University of Arkansas did not receive any of the amount paid. The check was endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KDMS radio for the production of the Razorback Scoreboard Show or Razorback Report Show:

Date	Payee	Amount
12-22-65	Razorback Scoreboard Show	$50.00
12-20-66	Razorback Scoreboard Show	50.00
11-20-67	Razorback Report Show	48.00
12-20-67	Razorback Scoreboard Show	50.00
11-20-68	Razorback Report Show	56.00
12-18-68	Razorback Scoreboard Show	50.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show">*93 or Razorback Scoreboard Show over radio station KDMS. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show or Razorback Report Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of Radio Enterprises, Inc., - KELD Radio, for the production of the Razorback Scoreboard Show, Razorback Report Show, or Razorback Basketball Report Show:

Date	Payee	Check No.	Amount
7-6-65	Razorback Score-	8204	$ 50.00
	board Show
7-15-66	Razorback Score-
	board Show	9064	50.00
7-18-67	Razorback Score-	9909	50.00
	board Show
11-10-67	Razorback Report	10219	72.00
	Show
12-8-67	Razorback Report	10292	48.00
	Show
2-8-68	Razorback Report	1437	65.00
	Show
3-12-68	Razorback Basketball	10522	55.00
	Report Show
7-18-68	Razorback Report	10881	120.00
	Show
7-8-68	Razorback Score-	10882	50.00
	board Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show, Razorback Scoreboard Show, or Razorback Basketball">*94 Report Show over radio station KELD. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show, Razorback Scoreboard Show or Razorback Basketball Report Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner on the account of Big Chief Broadcasting Company - KFAY Radio:

Date	Payee	Amount
10-9-67	Razorback Report Show	$24.00
11-17-67	Razorback Report Show	48.00
3-5-68	Razorback Report Show	48.00
3-5-68	Razorback Scoreboard Show	50.00
12-13-68	Razorback Scoreboard Show	50.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show and Razorback Scoreboard Show over radio station KFAY. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KHOG radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
11-20-64	Football Scoreboard	383	$50.00
	Show
11-27-65	Razorback Scoreboard	1333	50.00
	Show
10-29-66	Razorback Scoreboard -	2051	50.00
	University of Arkansas
1-24-68	Razorback Scoreboard	318	50.00
	Show
12-19-68	Razorback Scoreboard	575	50.00
	Show

">*95 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreback Show over radio station KHOG. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KNWA radio for the production of the Razorback Report Show or Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
10-23-67	Razorback Report Show	1908	$ 24.00
11-20-67	Razorback Report Show	1968	48.00
1-8-68	Razorback Report Show	2046	48.00
1-8-68	Razorback Scoreboard	2048	50.00
	Show
4-13-68	Razorback Report Show	2194	55.00
2-6-68	Razorback Report Show	2102	65.00
12-17-68	Razorback Report Show	2515	120.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KNWA. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report">*96 Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KSPR radio for the production of the Razorback Scoreboard Show:

Year Paid	Amount
1967	$50.00
1968	50.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KSPR. The University of Arkansas did not receive any of the amounts paid.

The following is a schedule which reflects payments made to petitioner by check on the account of KBJT radio for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
12-6-65	Razorback Scoreboard	2359	$50.00
	Show
11-23-66	Razorback Scoreboard	2640	50.00
	Show
10-12-67	Razorback Scoreboard	3399	24.00
	Show
11-14-67	Razorback Report Show	3169	48.00
12-11-67	Razorback Report Show	3455	48.00
12-20-67	Razorback Scoreboard	3474	50.00
	Show
10-16-68	Razorback Report Show	3989	24.00
11-14-68	Razorback Report Show	3725	56.00
12-5-68	Razorback Scoreboard	4017	50.00
	Show
12-5-68	Razorback Report Show	4018	40.00

">*97 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KBJT. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KXJK radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-9-65	Razorback Scoreboard	4769	$50.00
	Show
1-19-67	Razorback Scoreboard	5655	50.00
	Show
1-9-68	Razorback Scoreboard	07310	50.00
	Show
12-11-68	Razorback Scoreboard	08066	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KXJK. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects amounts paid by radio station KFPW for the">*98 production of the Razorback Scoreboard Show and Razorback Report Show to petitioner by check:

Year Paid	Amount
1964	$ 50.00
1965	50.00
1966	50.00
1967	170.00
1968	170.00

These amounts were received by petitioner. The amounts were paid for broadcasting the Razorback Report Show and Razorback Scoreboard Show over radio station KFPW. The University of Arkansas did not receive any of the amounts paid.

The following is a schedule which reflects payments made to petitioner by check on the account of KFSA-AM for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
12-6-65	Razorback Scoreboard	2887	$50.00
	Show
11-29-66	Razorback Scoreboard	4075	50.00
	Show
11-24-67	Razorback Report Show	4787	48.00
11-20-67	Razorback Report Show	01714	24.00
11-22-68	Razorback Report Show	666500	56.00
1-19-68	Razorback Report Show	12162	98.00
2-9-68	Razorback Report Show	15406	65.00
4-5-68	Razorback Report Show	25610	55.00
10-25-68	Razorback Report Show	61411	24.00
12-6-68	Razorback Report Show	69378	90.00

These amounts were received by petitioner. The checks">*99 were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show and Razorback Scoreboard Show over radio station KFSA-AM. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KMAG radio for the production of the Razorback Report Show and Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-7-65	Razorback Scoreboard	850	$50.00
	Show
2-1-67	Razorback Scoreboard	1613	50.00
	Show
11-30-67	Razorback Report Show	2217	72.00
12-2-67	Razorback Report Show	2233	48.00
12-26-67	Razorback Scoreboard	2251	50.00
	Show
10-9-68	Razorback Report Show	2713	24.00
11-20-68	Razorback Report Show	2796	56.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show and Razorback Scoreboard Show over radio station KMAG. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback">*100 Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payment made to petitioner by check on the account of KTCS radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-20-68	Razorback Scoreboard	4665	$50.00
	Show

This amount was received by petitioner. The check was issued in payment of amount due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KTCS. The University of Arkansas did not receive any of the amount paid. The check was endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KHOZ radio for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
9-11-64	Football Scoreboard	A-1735	$50.00
	Show
9-16-65	Razorback Scoreboard	A-3125	50.00
	Show
12-5-66	Razorback Scoreboard	A-4877	50.00
	Show
10-13-67	Razorback Report Show	A-6276	24.00
11-3-67	Razorback Report Show	A-6380	48.00
12-8-67	Razorback Report Show	A-6541	48.00
12-20-67	Razorback Scoreboard	A-6598	50.00
	Show
10-10-68	Razorback Report Show	A-7915	24.00
11-11-68	Razorback Report Show	A-8062	56.00
12-9-68	Razorback Scoreboard	A-8209	50.00
	Show
12-9-68	Razorback Report Show	A-8210	40.00

">*101 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show over radio station KHOZ. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station KAWW for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
1-13-68	Razorback Scoreboard	196	$50.00
	Show
12-16-68	Razorback Scoreboard	468	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KAWW. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to the petitioner by check on the account of radio station KFFA for the production of the Razorback Scoreboard show as follows:

Date	Payee	Check No.	Amount
12-12-64	Razorback Football	691	$50.00
	Scoreboard
12-10-65	Razorback Scoreboard	1387	50.00
	Show
12-9-66	Razorback Scoreboard	2137	50.00
	Show
1-10-68	Razorback Scoreboard	2952	50.00
	Show
12-10-68	Razorback Scoreboard	3601	50.00
	Show

">*102 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KFFA.The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station KBHS for the production of the Razorback Report Show:

Date	Payee	Check No.	Amount
10-6-67	Razorback Report Show	5835	$24.00
11-8-67	Razorback Report Show	5948	48.00
12-10-67	Razorback Report Show	6084	48.00
10-8-68	Razorback Report Show	6999	24.00
11-11-68	Razorback Report Show	7146	56.00
12-5-68	Razorback Report Show	7223	40.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show over radio station KBHS. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on">*103 the account of radio station KXOW for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
10-16-67	Razorback Report Show	1006	$16.00
11-10-67	Razorback Report Show	1073	48.00
12-11-67	Razorback Report Show	1130	48.00
1-11-68	Razorback Scoreboard	1307	50.00
	Show
10-10-68	Razorback Report Show	2277	24.00
11-8-68	Razorback Report Show	2408	56.00
12-10-68	Razorback Report Show	2506	40.00
12-10-68	Razorback Scoreboard	2507	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show and Razorback Scoreboard Show over radio station KXOW. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed by Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payment made to petitioner by check on the account of KZNG Broadcasting Company for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
6-5-67	University of Arkansas	1953	$50.00
	Razorback Scoreboard
	Show

">*104 This amount was received by petitioner. The check was issued in payment of amount due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KZNG. The University of Arkansas did not receive any of the amount paid.

The following is a schedule which reflects payments made to petitioner by check on the account of KARK radio for the production of the Razorback Report Show, Razorback Scoreboard Show and Razorback Basketball Report Show:

Date	Payee	Check No.	Amount
11-9-67	Razorback Report Show	2476	$48.00
1-9-68	Razorback Scoreboard Show	2942	2.00
2-8-68	Razorback Basketball	3198	65.00
	Report Show
3-8-68	Razorback Basketball	3458	55.00
	Report Show
12-10-68	Razorback Scoreboard	5749	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show, Razorback Scoreboard Show and Razorback Basketball Report Show over radio station KARK. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show, Razorback Scoreboard Show, or Razorback Basketball Report">*105 Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KLRA, Inc., for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
7-8-66	Razorback Scoreboard	10670	$ 50.00
	Show
7-19-67	Razorback Scoreboard	11942	50.00
	Show
10-6-67	Razorback Report Show	12193	24.00
11-8-67	Razorback Report Show	12292	48.00
12-1-67	Razorback Report Show	12360	48.00
1-26-68	Razorback Report Show	12588	65.00
3-14-68	Razorback Report Show	12784	55.00
7-18-68	Razorback Scoreboard	13235	50.00
	Show
7-18-68	Razorback Report Show	13236	120.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show and Razorback Scoreboard Show over radio station KLRA. The University of Arkansas did not receive any of the amounts paid.

The following is a schedule which reflects payments made to petitioner by check on the account of KVMA radio for the production of the Razorback Report Show or Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-8-66	Bob Cheyne	16810	$50.00
10-9-67	Bob Cheyne	17565	24.00
11-11-67	Razorback Report Show	17620	48.00
12-11-67	Razorback Report Show	17678	48.00
1-9-68	Razorback Scoreboard	17772	50.00
	Show
10-10-68	Razorback Report Show	18355	16.00
11-11-68	Bob Cheyne	18444	56.00

">*106 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KVMA. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show or Razorback Report Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KBOK radio for the production of the Razorback Report Show and Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
11-16-64	Football Scoreboard Show	9516	$50.00
11-27-65	Razorback Scoreboard	10430	50.00
	Show
11-23-66	Razorback Scoreboard	11389	50.00
	Show
10-10-67	Razorback Report Show	83	24.00
11-13-67	Razorback Report Show	182	48.00
12-11-67	Razorback Report Show	255	48.00
12-15-67	Razorback Scoreboard	277	50.00
	Show
10-9-68	Razorback Report Show	1073	24.00
11-11-68	Razorback Report Show	1171	56.00
12-10-68	Razorback Report Show	1236	40.00
12-10-68	Razorback Scoreboard	1237	50.00
	Show

These amounts were received by petitioner. The checks">*107 were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KBOK. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station KENA for the production of the Razorback Report Show and Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
10-18-67	Razorback Report Show	463	$24.00
11-20-67	Razorback Report Show	500	48.00
12-31-67	Razorback Report Show	563	48.00
1-15-68	Razorback Scoreboard	583	40.00
	Show
10-9-68	Razorback Report Show	1004	24.00
12-16-68	Razorback Report Show	1121	96.00
12-16-68	Razorback Scoreboard	1120	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KENA. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback">*108 Report Show or Razorback Scoreboard Show and all checks were further endorsed by Bob Cheyne except Check No. 463.

The following is a schedule which reflects payment made to petitioner by check on the account of Newport Broadcasting Company, Radio Station KTPA, for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
1-13-68	Razorback Scoreboard	1129	$50.00
	Show

This amount was received by petitioner. The check was issued in payment of amount due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KTPA. The University of Arkansas did not receive any of this amount paid. The check was endorsed by Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KDRS radio for the production of the Razorback Report Show and Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
11-29-65	Razorback Scoreboard	3358	$50.00
	Show
10-5-67	Razorback Report Show	242	24.00
11-2-67	Razorback Report Show	334	52.00
12-2-67	Razorback Report Show	446	44.00
2-12-68	Razorback Scoreboard	653	50.00
	Show
8-16-68	Razorback Scoreboard	1093	50.00
	Show
10-5-68	Razorback Report Show	1224	24.00
12-4-68	Razorback Report Show	1372	40.00
12-30-68	Razorback Report Show	1439	56.00

">*109 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KDRS. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show or Razorback Report Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station KADL for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-31-65	Razorback Scoreboard	1733	$50.00
	Show
12-27-66	Razorback Scoreboard	2094	50.00
	Show
1-10-68	Razorback Scoreboard	2457	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KADL. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio station KOTN for the production">*110 of the Razorback Report Show or Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
10-9-67	Razorback Report Show	1070	$24.00
1-15-68	Razorback Scoreboard	01279	50.00
	Show
4-15-68	Razorback Report Show	1477	98.00
10-14-68	Razorback Report Show	1988	24.00
11-11-68	Razorback Report Show	02072	56.00
12-10-68	Razorback Scoreboard	02155	50.00
	Show
12-10-68	Razorback Report Show	02156	40.00

These amounts were received by petitioner. The checks were were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KOTN.The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show or Razorback Report Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KPOC radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-17-65	Razorback Scoreboard	11940	$50.00
	Show
12-20-66	Bob Cheyne	387	50.00
2-28-68	Razorback Scoreboard	13564	50.00
	Show

These amounts were">*111 received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KPOC. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payment made to petitioner by check on the account of radio station KTPA for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
4-18-67	Razorback Scoreboard	541	$50.00
	Show

This amount was received by petitioner. The check was issued in payment of amount due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KTPA. The University of Arkansas did not receive any of the amount paid. The check was endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payment made to petitioner by check on the account of KAMO radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-4-68	Razorback Scoreboard Show	1325	$50.00

This amount was received by petitioner. The check">*112 was issued in payment of amount due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KAMO. The University of Arkansas did not receive any of the amount paid. The check was endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KWCB radio for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
12-8-65	Razorback Scoreboard	3261	$50.00
	Show
12-12-66	Razorback Scoreboard	3935	50.00
	Show
10-9-67	Razorback Report Show	4481	24.00
11-10-67	Razorback Report Show	4563	48.00
12-11-67	Razorback Report Show	4621	48.00
1-10-68	Razorback Scoreboard	4654	50.00
	Show
11-10-68	Razorback Report Show	5295	56.00
12-10-68	Razorback Report Show	127	90.00
	and Scoreboard Show
10-10-68	Razorback Report Show	5210	24.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting Razorback Scoreboard Show or Razorback Report Show over radio station KWCB. The University of Arkansas did not receive">*113 any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KBRS-AM for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
12-3-65	Razorback Scoreboard	3459	$50.00
	Show
11-30-66	Razorback Scoreboard	4142	50.00
	Show
10-20-67	Razorback Report Show	01713	24.00
11-24-67	Razorback Report Show	04786	48.00
12-29-67	Razorback Report Show	9068	48.00
1-5-68	Razorback Report Show	10147	50.00
10-18-68	Razorback Report Show	59932	24.00

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting Razorback Scoreboard Show and Razorback Report Show over radio station KBRS-AM. The University of Arkansas did not receive any of the amounts paid.

The following is a schedule which reflects payments made to petitioner by check on the account of KWAK radio for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
12-7-64	Football Scoreboard	1042	$50.00
	Show
12-10-65	Razorback Scoreboard	2110	50.00
	Show
12-9-66	Razorback Scoreboard	2894	50.00
	Show
10-10-67	Razorback Report Show	3519	24.00
11-10-67	Razorback Report Show	3598	48.00
12-11-67	Razorback Report Show	3640	44.00
12-15-67	Razorback Scoreboard	3681	50.00
	Show
10-10-68	Razorback Report Show	4278	24.00
11-11-68	Razorback Report Show	4339	56.00
12-10-68	Razorback Report Show	4395	40.00
12-10-68	Razorback Report Show	4408	50.00

">*114 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KWAK. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio KTFS for the production of the Razorback Report Show or Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
10-12-67	Razorback Report Show	662	$24.00
11-10-67	Razorback Report Show	749	48.00
12-13-67	Razorback Report Show	843	48.00
1-11-68	Razorback Scoreboard	929	50.00
	Show
10-9-68	Razorback Report Show	1765	24.00
11-11-68	Razorback Report Show	1877	56.00
12-13-68	Razorback Report Show	1974	40.00
12-13-68	Razorback Scoreboard	1975	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Report Show or Razorback Scoreboard Show over radio station KTFS. The">*115 University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show, Razorback Scoreboard Show, Razorback Report Show, Bob Cheyne, or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of KRLW radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
11-25-66	Razorback Scoreboard	6496	$50.00
	Show
2-15-68	Razorback Scoreboard	7373	50.00
	Show
12-6-68	Razorback Scoreboard	7984	50.00
	Show

These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KRLW. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects payments made to petitioner by check on the account of radio KWRF for the production of the Razorback Scoreboard Show and Razorback Report Show:

Date	Payee	Check No.	Amount
11-13-64	Football Scoreboard Show	343	$50.00
12-5-66	Razorback Scoreboard	1710	50.00
	Show
11-7-67	Razorback Report Show	2328	48.00
12-4-67	Razorback Report Show	2371	48.00
12-15-67	Razorback Scoreboard	2406	50.00
	Show
10-7-67	Razorback Report Show	2278	24.00
10-7-68	Razorback Report Show	2968	24.00
11-7-68	Razorback Report Show	3030	56.00

">*116 These amounts were received by petitioner. The checks were issued in payment of amounts due the listed payee for broadcasting the Razorback Scoreboard Show or Razorback Report Show over radio station KWRF. The University of Arkansas did not receive any of the amounts paid. All checks were endorsed Razorback Report Show or Razorback Scoreboard Show, Bob Cheyne.

The following is a schedule which reflects a payment made to petitioner by check on the account of KSUD radio for the production of the Razorback Scoreboard Show:

Date	Payee	Check No.	Amount
12-13-68	Razorback Scoreboard	4231	$45.00
	Show

This amount was received by petitioner. The check was issued in payment of amount due the listed payee for broadcasting the Razorback Scoreboard Show over radio station KSUD. The University of Arkansas did not receive any of this amount paid. The check was endorsed Razorback Scoreboard Show, Bob Cheyne.

Petitioner did not keep any contemporaneous records of the amounts he received from the radio stations for any of the three radio shows produced by him.

Petitioner prepared without assistance his Federal income tax returns for the years 1964 through">*117 1968.

Petitioner has a bachelor of science degree from the University of Arkansas in Journalism and has taken a few hours of graduate work in history. In addition, he served as the editor of a Navy newspaper during World War II.

During the investigation of petitioner's tax liabilities for the years 1964 through 1968, Special Agent Connaughton asked petitioner's counsel for any records of petitioner's income for the years in question. There were no specific records reflecting amounts received by petitioner from the radio stations. However, by examining bank deposits Mr. Connaughton determined income relating to the radio stations. The deposit slips did not specifically list the radio stations, but rather reflected only the amount of the deposit.

The national advertising in the University of Arkansas football programs was, prior to and during the years in question, managed by the Spencer Advertising Company, New York, New York. It furnished the University of Arkansas pre-printed advertisements which were used in the University of Arkansas football programs and obtained national advertising clients for the University of Arkansas football programs. Pursuant to a contract with">*118 the University of Arkansas, Spencer Advertising Company was to keep 15 percent of the amounts paid for advertising and was to remit the balance (less costs of printing) to the University of Arkansas.

Warren King, an internal auditor for the University of Arkansas, conducted a routine audit of the advertising income of the University of Arkansas Athletic Department, and discovered that the University of Arkansas should have received $12,135.62 from Spencer Advertising Compny for the years 1964 through 1968, but only received $350 during such period.

Petitioner caused a letter to be sent to the Spencer Advertising Company directing that $350 be sent to the University of Arkansas and that the balance be paid to him. These instructions were carried out by Spencer Advertising Company.

Petitioner caused to be sent to the University of Arkansas a report on national advertising in the 1968 football program which did not accurately reflect income from the Spencer Advertising Company. The report showed total revenue from Spencer as $2,600 and net revenue as $350 when, in truth and fact, the total revenue was $6,053.36 and net revenue was $3,803.36.

Petitioner was aware of the actual">*119 revenue from Spencer Advertising Company which he had received, but he did not correctly report to the University of Arkansas with respect to these funds.

There were no University of Arkansas records listing amounts received from Spencer Advertising Company for national advertising in the University of Arkansas football programs outside of the $350 received in 1968. The Athletic Department advertising is set out in the concession part of the Athletic Section of the University of Arkansas books and records.

Although petitioner cooperated with Warren King with respect to finding out why certain companies were not billed for advertising, he did not disclose to University officials that he had received the payments from Spencer Advertising Company for such advertising.

Because of petitioner's actions with respect to the advertising income from Spencer Advertising Company, he was asked to make restitution of the money and to resign his position at the University of Arkansas.

On May 22, 1969, petitioner wrote a letter to the then president of the University of Arkansas asking for a second chance and requesting forgiveness for what he had done. In that letter he expressed regret">*120 for the grief he had caused those he had known and respected at the University of Arkansas, including John Barnhill, the athletic director.

The following is a schedule which reflects net payments made by Spencer Advertising Company from national advertising proceeds with respect to the University of Arkansas football programs for the years in question:

Date	Payee	Check No.	Amount
3-2-64	Robert Cheyne - Program	5808	$1,831.34
	Manager U of A
3-10-64	Robert Cheyne - Program	5930	221.62
	Manager U of A
2-26-65	Robert Cheyne - Program	7408	2,462.28
	Manager U of A
2-15-66	Robert Cheyne - Program	9055	1,865.23
	Manager U of A
2-23-66	Robert Cheyne - Program	9181	553.92
	Manager U of A
3-6-67	Robert Cheyne - Program	11049	845.29
	Manager U of A
4-11-67	Robert Cheyne - Program	11531	1,915.21
	Manager U of A
3-8-68	Robert Cheyne - Program	13426	2,440.73
	Manager U of A

These amounts were received by petitioner. The University of Arkansas did not receive any of the amounts. The amounts were not reported on petitioners' Federal income tax returns for the years in question. Petitioner repaid in 1969 to the University">*121 of Arkansas the amounts he received from the Spencer Advertising Company.

On July 12, 1967, the Fort Smith Quarterback Club issued check number 871 in the amount of $350 payable to Bob Cheyne, Program Manager, in payment of amounts due the University of Arkansas for advertising in the University of Arkansas football programs. This amount was received by petitioner, but was not reported on petitioners' 1967 Federal income tax return. The University of Arkansas did not receive any of this amount.

On September 8, 1967, Mr. and Mrs. Thomas D. Olmstead issued check number 1667 in the amount of $200 in payment of amounts due the University of Arkansas for advertising in the University of Arkansas football program which related to the Heber Springs Razorback Club. This amount was received by petitioner, but was not reported on petitioners' 1967 Federal income tax return. The University of Arkansas did not receive any of this amount.

During the period 1964 through 1968, petitioner served as announcer in the annual State Highschool Basketball and Annual Allstar Football-Basketball games. For these services, the Arkansas Broadcasters Association compensated petitioner by check as">*122 follows:

Date	Payee	Check No.	Amount
3-2-64	Bob Cheyne	18	$175.00
8-28-64	Bob Cheyne	48	75.00
4-6-65	Bob Cheyne	16	105.00
8-28-65	Bob Cheyne	36	37.50
8-25-66	Bob Cheyne	154	75.00
3-9-67	Bob Cheyne	112	125.00
9-20-67	Bob Cheyne	106	75.00
8-17-68	Bob Cheyne	194	25.00

These amounts were not reported on petitioners' Federal income tax returns for the periods in question.

During the years 1967 and 1968 petitioner wrote articles for the annual magazine entitle "Razorback State Football" published by Wonder State Publications. For his services he received $200 during each of the years 1967 and 1968. These amounts were not reported on petitioners' 1967 and 1968 Federal income tax returns.

For the taxable year 1964, petitioners deposited $13,738.80 to their joint checking account; withheld cash in the amount of $554; redeposited cash or deposited loans (non-taxable) in the amount $810of, and had unreported income in the amount of $4,272.84.

For the taxable year 1965, petitioners deposited $17,858.65 to their joint checking account; withheld cash in the amount of $69.70; deposited non-taxable sums in the amount of $3,790.87; ">*123 and had unreported income in the amount of $4,837.43.

For the taxable year 1966, petitioners deposited $17,170.36 to their joint checking account; withheld cash in the amount of $218.26; deposited non-taxable sums in the amount of $1,731.16; had unreported income from these bank deposits in the amount of $6,812.02; and had additional unreported income in the amount of $675 which was not included in the deposits for 1966.

For the taxable year 1967, petitioners deposited $16,156.06 to their joint checking account; withheld cash in the amount of $1,202.50; deposited non-taxable sums in the amount of $318.46; had unreported income from deposits in the amount of $7,466.84; and had additional unreported income for the year 1967 which was not included in the deposits in the amount of $2,154.91.

For the taxable year 1968, petitioners deposited $18,087.35 to their joint checking account; withheld cash in the amount of $1,743.90; deposited non-taxable sums in the amount of $379.90; had unreported income from deposits in the amount of $9,656.05; and had additional unreported income not deposited in the amount of $2,122.

In 1967 the petitioner entered and won a contest of College and">*124 University Sports Information Directors. His prize was a 1968 Chevrolet Camaro.This prize was not reported as income on petitioners' 1968 Federal income tax return, the year of receipt. The value at the time of receipt was $2,300 and is includable in petitioners' income for 1968.

During each of the years 1965, 1966, 1967, and 1968, J.D. Fisher Buick Agency, Fayetteville, Arkansas, furnished petitioner a new automobile in exchange for advertising in the University of Arkansas football programs. The value of the use of this car which was not reported in the income tax returns of petitioners for these years was $600 per year. The automobile was used by petitioner on University business 50 percent of the time and for personal purposes 50 percent of the time.

During each of the years 1966, 1967, and 1968, the Velda Rose Motel, Hot Springs, Arkansas, furnished petitioner with due bills for motel accommodations in exchange for advertising in the University of Arkansas football programs. The value of these due bills which was not reported in the Federal income tax returns of petitioners for these years $350was per year.

Petitioner did not keep books and records of the amounts">*125 paid for additional business expenses not claimed on his returns.

Some of the amounts petitioner incurred as additional business expenses were reimbursed to him by the University of Arkansas by the procedure of obtaining cash advances from the Razorback Fund. These cash advances were replaced in the Razorback Fund when petitioner was paid pursuant to his voucher claims. The University of Arkansas checks paying the voucher claims generally went directly to the Razorback Fund, and, although payable to petitioner, were endorsed by Vera Moody for him. The cash obtained from the University of Arkansas pursuant to the vouchers did go back into the Razorback Fund.

Petitioner traveled extensively and obtained cash advances from the Razorback Fund one to two times per week during the various sports seasons.

Petitioner incurred liability for football tickets which was, in fact, paid by the University of Arkansas Athletic Department.

Some of the amounts paid to petitioner by the NCAA for travel reimbursement were also claimed and paid to petitioner by the University of Arkansas. Hence, additional out-of-pocket expenses incurred by petitioner on these trips were paid by the University">*126 of Arkansas.

Petitioner attended an NCAA meeting in Tucson, Arizona, in January 1967, and was reimbursed by the NCAA for travel and per diem. He obtained a cash advance from the Razorback Fund, submitted a voucher for this trip, and the fund was reimbursed by the University of Arkansas.

Petitioner attended an NCAA meeting in Louisville, Kentucky, in March 1967, and was reimbursed by the NCAA for travel and per diem. He obtained a cash advance from the Razorback Fund, submitted a voucher for this trip, and the fund was reimbursed by the University of Arkansas.

Petitioner attended an NCAA meeting in New York, New York, in June 1967, and was reimbursed by the NCAA for travel and per diem. He obtained a cash advance from the Razorback Fund, submitted a voucher for this trip, and the fund was reimbursed by the University of Arkansas.

Petitioner attended an NCAA meeting in New York, New York, in January 1968, and was reimbursed by the NCAA for travel and per diem. He obtained a cash advance from the Razorback Fund, submitted a voucher, and the fund was reimbursed by the University of Arkansas.

Petitioner attended an NCAA meeting in Santa Barbara, California, in February 1968, ">*127 and was reimbursed by the NCAA for travel and per diem. He obtained a cash advance from the Razorback Fund, submitted a voucher, and the fund was reimbursed by the University of Arkansas for this trip.

Petitioner attended an NCAA meeting in Los Angeles, California, in March 1968, and was reimbursed by the NCAA for travel and per diem. He obtained a cash advance from the Razorback Fund, submitted a voucher, and the fund was reimbursed by the University of Arkansas.

Petitioner attended an NCAA meeting in New York, New York, in September 1968, and was reimbursed by the NCAA for travel and per diem. He obtained a cash advance from the Razorback Fund, submitted a voucher for this trip, and the fund was reimbursed by the University of Arkansas.

The University of Arkansas reimbursed petitioner for taxi, telephone, and some miscellaneous expenses.

Petitioner paid the following deductible business expenses in connection with the Razorback Scoreboard Show for the years in issue:

Type of Expense	1964	1965	1966	1967	1968
Engineering	$250.00	$250.00	$250.00	$250.00	$250.00
Wire Information	75.00	75.00	75.00	75.00	75.00
Fee
Transportation and	300.00	300.00	300.00	300.00	300.00
Meals for Spotters
Subscription Fee	100.00	100.00	100.00	100.00	100.00
for Weekly Foot-
ball Service
Total	$725.00	$725.00	$725.00	$725.00	$725.00

">*128 Petitioner paid the following deductible business expenses in connection with the Razorback Report Show for the years in issue:

Type of Expense	1964	1965	1966	1967	1968
Engineering	$ 500.00	$ 500.00	$ 500.00	$ 500.00	$ 500.00
Guest Fees	300.00	300.00	300.00	300.00	300.00
Tapes	150.00	150.00	150.00	150.00	150.00
Promotional Tapes	250.00	250.00	250.00	250.00	250.00
CATV Cable	60.00	60.00	60.00	60.00	60.00
Total	$1,260.00	$1,260.00	$1,260.00	$1,260.00	$1,260.00

Petitioner paid the following deductible business expenses in connection with the Razorback Basketball Report Show for the years in issue:

Type of Expense	1968
Guest Fees	$720.00
Tapes	120.00
Total	$840.00

Petitioner paid other deductible business expenses for the years in issue, as follows:

Type of Expense	1964	1965	1966	1967	1968
Travel Uniforms	$120.00	$ 40.00	$120.00		$120.00
Cleaning of Travel	40.00	40.00	40.00	$ 40.00	40.00
Uniforms
Attache Case and	75.00	60.00	10.00	75.00	10.00
Spotter Board
Professional Dues	50.00	50.00	50.00	50.00	50.00
Total	$285.00	$190.00	$220.00	$165.00	$220.00

">*129 Petitioners and respondent did not execute an agreement extending the period for assessment of taxes for the year 1964.

Petitioners' counsel and respondent executed an agreement with respect to the taxable year 1965 extending the period for assessment of taxes for that year to April 15, 1973. Said agreement is valid only if there is a 25 percent omission of gross income from petitioners' return for that year.

Petitioners' counsel and respondent executed an agreement with respect to the taxable years 1965 and 1966 extending the period for assessment of taxes for those years to December 31, 1974. Said agreement is valid only if there is a 25 percent omission of gross income from petitioners' return for such years.

Petitioners' counsel and respondent executed an agreement with respect to the taxable year 1966 extending the period for assessment of taxes for that year to December 31, 1975. Said agreement is valid only if there is a 25 percent omission of gross income from petitioners' return for that year.

Petitioners' counsel and respondent executed an agreement with respect to the taxable year 1965 extending the period for assessment of taxes for that year to December 31, 1975. ">*130 Said agreement is valid only if there is a 25 percent omission of gross income from petitioners' return for that year.

Petitioners' counsel and respondent executed an agreement with respect to the taxable year 1967 extending the period for assessment of taxes for that year to December 31, 1974. Said agreement is valid only if there is a 25 percent omission of gross income from petitioners' return for that year.

Petitioners' counsel and respondent executed an agreement with respect to the taxable year 1967 extending the period for assessment of taxes for that year to December 31, 1975. Said agreement is valid only if there is a 25 percent omission of gross income from petitioners' return for that year.

Petitioners' counsel and respondent executed a consent with respect to the taxable year 1968 extending the period for assessment of taxes for that year to December 31, 1975. Said agreement is valid only if there is a 25 percent omission of gross income from petitioners' return for that year.

Petitioner was indicted, pursuant to section 7206(1) of the Code, in Criminal No. F-73-CR-7 in the United States District Court for the Western District of Arkansas, on two counts that">*131 he "wilfully and knowingly" subscribed to his 1967 and 1968 Federal income tax returns which were verified by a written declaration that they were made under penalties of perjury and filed with the Internal Revenue Service. He entered a plea of not guilty to the indictment. He was tried and on November 29, 1973, a not guilty verdict was rendered on both counts of the indictment. This is reflected in the judgment of the United States District Court, Western District of Arkansas, dated November 29, 1973.

ULTIMATE FINDINGS OF FACT

1. No part of the underpayment of income tax for each of the years 1964 through 1968 was due to fraud on the part of petitioner.

2. The assessment of a deficiency for the year 1964 is barred by the statute of limitations under the provisions of section 6501(a) of the Code.

3. For each of the years 1965 through 1968 the petitioners omitted from each of their Federal income tax returns gross income in excess of 25 percent of the amount of gross income stated on such returns. Therefore, under section 6501(e)(1)(A) the assessment of deficiencies for each of the years 1965 through 1968 is not barred by the 6-year period of limitations, as extended">*132 by the parties pursuant to section 6501(c)(4).

4. Petitioner is entitled to deduct the following business expenses for the years in issue:

Year	Amount
1964	$2,280.00
1965	2,175.00
1966	2,205.00
1967	2,130.00
1968	3,045.00

5. Petitioner realized income of $300 per year for the taxable years 1965 through 1968 from the use of an automobile furnished by J. D. Fisher Buick Company.

6. Petitioner realized income of $350 per year for 1966, 1967, and 1968 from due bills for motel accommodations furnished to him in exchange for advertising in the University of Arkansas football programs.

OPINION

Issue 1--Collateral Estoppel

Petitioner contends that respondent is collaterally estopped from asserting the additions to tax for fraud for the years 1967 and 1968 because of his acquittal on criminal charges of filing false and fraudulent income tax returns under section 7206(1). Respondent argues that petitioner's position is without merit and unsupported by law.

We agree with the respondent that the doctrine of collateral estoppel does not apply in these circumstances. The degree of the burden of proof is greater in criminal cases than in civil">*133 cases. Helvering v. Mitchell,303 U.S. 391">303 U.S. 391 (1938). In Lias v. Commissioner,24 T.C. 280">24 T.C. 280 (1955), affd. 235 F.2d 879 (4th Cir. 1956), cert. denied 353 U.S. 935">353 U.S. 935 (1957), this Court said at page 321:

The final contention of the petitioner that the jury found him not guilty of willful attempt to evade income taxes for the years 1942 to 1946, inclusive, which cover a part of the years before us, requires no extended discussion. In Helvering v. Mitchell,303 U.S. 391">303 U.S. 391, the Supreme Court held that an acquittal of a taxpayer on a charge of willful attempt to evade or defeat income tax was no bar to a collection of the 50 per cent addition to the tax for fraud.

And in Amos v. Commissioner,43 T.C. 50">43 T.C. 50 (1964), affd. 360 F.2d 358 (4th Cir. 1965), we said at page 57:

What respondent does contend here is that under the doctrine of collateral estoppel a taxpayer who has been convicted of willfully attempting to evade his income taxes may not thereafter relitigate in this forum the question whether the tax deficiencies resulting from his previous attempted evasion were "due to fraud. ">*134 " Clearly, such a contention is not inconsistent with the principle laid down in 303 U.S. 391">Helvering v. Mitchell,supra, because the main thrust of that case was simply that an acquittal in a criminal proceeding wherein a greater burden of proof is required does not work an estoppel in a civil case dependent upon the same finding of fact, but wherein the burden of proof is lesser. Because an acquittal does not negative a fact in a subsequent suit wherein a lesser degree of proof is required, the same conclusion does not follow from the converse of such a situation, i.e., where the criminal trial resulted in a conviction. * * *

See also Otsuki v. Commissioner,53 T.C. 96">53 T.C. 96, 53 T.C. 96">112 (1969); Stratton v. Commissioner,54 T.C. 255">54 T.C. 255, 54 T.C. 255">283-284 (1970); Benes v. Commissioner,42 T.C. 358">42 T.C. 358, 42 T.C. 358">384 (1964), affd. 355 F.2d 929 (6th Cir. 1966); Gonzalez v. Commissioner,T.C. Memo. 1977-240 (July 27, 1977).

Accordingly, we hold that petitioner's acquittal on criminal charges of filing false and fraudulent income tax returns for 1967 and 1968 did not determine that he did not file false and fraudulent returns">*135 for civil purposes and, therefore, is not a bar to a subsequent civil determination which asserts civil fraud penalties.

Issue 2--Additions to Tax under Section 6653(b)

While respondent may not be collaterally estopped to claim civil fraud, it does not necessarily follow that he has sustained his burden of proof as to fraud for the years 1964 through 1968. Fraud is never presumed. It must be proved by clear and convincing evidence. Carter v. Campbell,264 F.2d 930, 935 (5th Cir. 1959); Green v. Commissioner,66 T.C. 538">66 T.C. 538, 66 T.C. 538">549 (1976); Pigman v. Commissioner,31 T.C. 356">31 T.C. 356, 31 T.C. 356">370 (1958). The Commissioner bears the burden of proving fraud. Section 7454(a); Rule 142(b), Tax Court Rules of Practice and Procedure; Arlette Coat Co. v. Commissioner,14 T.C. 751">14 T.C. 751 (1950). The existence of fraud is a question of fact to be resolved upon consideration of the entire record before us. Gajewski v. Commissioner,67 T.C. 181">67 T.C. 181, 67 T.C. 181">199 (1976). Neither gross negligence nor mere suspicion of fraud will suffice. Mitchell v. Commissioner,118 F.2d 308, 310 (5th Cir. 1941), remanding 40 B.T.A. 424">40 B.T.A. 424 (1939),">*136 on remand 45 B.T.A. 822">45 B.T.A. 822 (1941); Ferguson v. Commissioner,14 T.C. 846">14 T.C. 846, 14 T.C. 846">849 (1950). To establish fraud the Commissioner must show that the taxpayer deliberately intended to evade the payment of taxes, which he knew or believed he owed, by conduct intended to conceal, mislead or otherwise prevent the collection of such taxes. Stoltzfus v. United States,398 F.2d 1002, 1004 (3d Cir. 1968), cert. denied 393 U.S. 1020">393 U.S. 1020 (1969); Mitchell v. Commissioner,supra at 310.

In fairness to the parties we have made detailed findings of fact based upon the stipulations, documentary evidence, and the testimony of several witnesses. ² We believe the petitioner did understate his income for the years in issue and that he did deal in cash without adequate records. But we also believe he had substantial business expenses, only part of which have been allowed. Obviously, the petitioner handled his business affairs in a loose manner and he was careless in the preparation of his Federal income tax returns. However, such acts are not necessarily incidents of fraudulent intent. Reininger v. Commissioner,11 T.C.M. 444 (1952).">*137 Although he had minimal knowledge of accounting, bookkeeping, and tax matters, petitioner's education and business experience as a sports information director for a large state university would certainly justify the conclusion that he should have known better and that he was grossly negligent. But these elements do not constitute proof that he did know better and that his returns were fraudulent. Petitioner cooperated with respondent's representatives. He did not mislead them. He did not attempt to conceal the income he received from the sports shows.

After examining and evaluating the facts of record, we conclude that the respondent has failed to carry his burden of proving fraud by clear and convincing evidence. In addition to the elements previously enumerated, we have given weight to the fact that the petitioner was acquitted by his peers of criminal tax charges, even though we are cognizant of the greater burden of proof required in such an action. We have also given weight to the candor and credibility of the petitioner and to his reputation">*138 for honesty and veracity. ³

Issue 3--Statute of Limitations

Having decided that there was no fraud, it follows that the statute of limitations is a bar to the assessment and collection of any deficiency for the year 1964. Section 6501(a) of the Code. The period of assessment for 1964 was not extended by agreement of the parties. However, as to the years 1965 through 1968, the respondent has alleged and contends that he is entitled to the 6-year period provided for in section 6501(e)(1)(A), ⁴ as extended by the parties pursuant to section 6501(c)(4). Petitioners' Federal income tax returns for the years 1965 through 1968 were filed on the following dates:

Year	Date Return Filed
1965	April 15, 1966
1966	April 15, 1967
1967	April 15, 1968
1968	April 15, 1969

">*139 Timely agreements executed by the parties extended the period for assessment for each of the above years to December 31, 1975. The statutory notice of deficiencies covering such years was mailed to the petitioners on December 18, 1975, which date was prior to the expiration of the 6-year period of limitations applicable under section 6501(e)(1)(A) as extended by the parties under section 6501(c)(4).

Twenty-five percent of the amount of "gross income" stated in the returns for the years in question was as follows:

	Gross Income	25 Percent
Year	Stated	of Gross Income
1965	$10,706.59	$2,676.65
1966	10,621.98	2,655.50
1967	11,522.75	2,880.69
1968	13,153.91	3,288.48

The amounts omitted from gross income, as reflected in our findings of fact, exceed 25 percent of stated gross income in each of the years 1965 through 1968. Consequently, it is clear that the assessment and collection of deficiencies in petitioners' Federal income taxes for the years 1965 through 1968 are not barred by the statute of limitations. We so hold.

Issue 4--Business Expenses

Petitioner contends that he paid substantial business expenses in connection with his">*140 duties at the University of Arkansas, and in particular with respect to the Razorback Scoreboard Show, the Razorback Report Show and the Razorback Basketball Report Show. He has claimed the following business expenses:

Year	Total Expenses
1964	$5,939.00
1965	6,014.00
1966	5,959.00
1967	6,014.00
1968	7,102.00

It is respondent's position that petitioner is not entitled to the claimed business expenses.

Petitioner did not maintain any books and records of his cash payments to engineers, guests, and spotters or other expenditures. Although there are no substantiating records, the petitioner has given credible testimony regarding the expenses and has urged us to apply the approximation rule of Cohan v. Commissioner,39 F.2d 540, 544 (2d Cir. 1930). We are satisfied from the testimony that some expenses were reimbursed by the University of Arkansas; that the petitioner did not pay for football tickets for automobile dealers; that the petitioner is not entitled to claimed travel and entertainment expenses which have not been substantiated pursuant to section 274 and the applicable Treasury regulations; and that the petitioner is not entitled">*141 to any office-in-home expenses, Sharon v. Commissioner,66 T.C. 515">66 T.C. 515, 66 T.C. 515">522-525 (1976), on appeal (9th Cir.). In other respects we think an approximation is justified. ⁵ Therefore, we have made as close an approximation as we can, "bearing heavily" upon the petitioner "whose inexactitude is of his own making." Cohan v. Commissioner,supra at 544. The business expenses allowed are set forth in our findings of fact and can be given effect in the Rule 155 computations.

Issue 5--Use of Automobiles

The issue as to the petitioner's use of automobiles furnished by the J. D. Fisher Company is factual. Petitioner contends that he did not realize income in the years 1965 through 1968 in the amount of $600 per year from the use of such automobiles because they were supplied to the University of Arkansas Athletic Department and were used by the petitioner when he was">*142 on University business. To the contrary, respondent's position is that $600 is includable in the income of petitioner for each year because (1) he admitted he used the cars in commuting from home to work and for other personal purposes and (2) he failed to allocate the value of the cars attributable to business purposes. We are satisfied, as set forth in our findings of fact, that such automobiles were used 50 percent of the time on University business and 50 percent of the time for personal purposes. Dole v. Commissioner,43 T.C. 697">43 T.C. 697, 43 T.C. 697">707 (1965), affd. per curiam 351 F.2d 308 (1st Cir. 1965). Therefore, we hold that the petitioner realized income of $300 for each of the years 1965 through 1968.

Issue 6--Use of Motel Accommodations

This issue is also factual. Petitioner contends that due bills provided to the University of Arkansas for his accommodations at the Velda Rose Motel in Hot Springs, Arkansas, do not constitute income to him for the years 1966, 1967, and 1968 in the amount of $350 per year because he was on University business on such trips. Respondent, on the other hand, argues that the petitioner has failed to carry his burden">*143 of proof on this issue and, therefore, he did realize additional income of $350 each year for his use of the motel accommodations during 1966, 1967, and 1968.

We agree with the respondent. The only evidence in the record is contained in the stipulation of facts that the Velda Rose Motel "furnished Robert D. Cheyne with due bills for motel accommodations in exchange for advertising in the University of Arkansas football programs," and that the value ( $350 for each year) of the due bills was not reported in petitioners' income tax returns for the years 1966, 1967, and 1968. There is no evidence indicating whether the accommodations were furnished to petitioner when he was on University business. He has failed in his burden of proof on this issue. Respondent's determination in this respect is presumptively correct. Welch v. Helvering,290 U.S. 111">290 U.S. 111 (1933).

To reflect the concessions made by the parties and our conclusions on the disputed issues,

Decision will be entered under Rule 155.

---

Footnotes

• 1. All statutory references herein are to the Internal Revenue Code of 1954, as amended and in effect for the years in issue, unless otherwise indicated.↩

• 2. We commend counsel for their thorough stipulations of facts and the expeditious manner in which testimony was elicited.↩

• 3. Paul V. Galloway, Bishop of the Methodist Church, testified regarding petitioner's good reputation in the communities where he has lived. Petitioner's parents were in the Salvation Army; his two brothers are ministers; and he is a lay leader of the North Arkansas Conference of the Methodist Church.↩

• 4. SEC. 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION.

  * * *

  (e) Substantial Omission of Items.--Except as otherwise provided in subsection (c)--

  (1) Income Taxes.--In the case of any tax imposed by subtitle A--

  (A) General rule.--If the taxpayer omits from gross income an amount properly includible therein which is in excess of 25 percent of the amount of gross income stated in the return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within 6 years after the return was filed. For purposes of this subparagraph--↩

• 5. We believe the petitioner's testimony that he paid the former basketball coach, P. T. "Duddy" Waller, $720 during the 1967-1968 season for appearing with him on about 24 pre-game Razorback Basketball Report Shows. It is inconceivable that Mr. Waller got only $5 per program.↩