
    M. Cohen, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 1071.
    Decided October 27, 1926.
    
      Held, that there was no evidence to warrant a conclusion that the Commissioner was not correct in determining that the petitioner’s net income was 18 per cent of , his gross sales.
    
      M. Cohen pro se.
    
      Robert A. Littleton, Esq., for the respondent.
    This is a proceeding for the redetermination of a deficiency in income taxes for 1922 and 1923 in the amount of $1,486.29.
    FINDINGS OF FACT.
    The taxpayer is an individual residing at Corsicana, Tex., and is engaged in the wholesale grocery business on a commission basis. He does not operate on a very large scale, and for that reason a number of the larger firms, such as the American Tobacco Co., do no business with him. This makes it necessary for him to procure much of his goods from local jobbers, thereby reducing his commissions.
    The taxpayer has never kept a complete set of books, and in his income-tax returns for the years in question reported as gross income amounts equal to 10 per cent of his gross sales for those years. Gross sales were $72,306.90 for 1922 and $141,396.94 for 1923. Upon audit of the taxpayer’s returns the Commissioner increased gross income to 18 per cent of the gross sales. This increase was based upon the average gross profits of other concerns in the United States doing a similar business.
   OPINION.

GRRen :

The taxpayer did not during the taxable years keep records from which his income could accurately be determined, and m making his returns estimated that 10 per cent of his gross sales was a fair return of income. The Commissioner has concluded on the facts before him that a return of 18 per cent of total sales properly reflects the taxpayer’s gross profits, and the burden is now on the petitioner to show error in this determination. This he has failed to do. He has testified as to conditions-existing which might tend to reduce profits to a smaller percentage of his total sales, and with reference to certain commodities has testified as to the percentage of profit which he “ figured ” (whatever that may mean) he made thereon, but at the most these are merely estimates and are not based on known facts.

Judgment will ~be entered for the Commissioner.  