Hilton M. Etheridge and Herman Savage, T/a Starlite Restaurant v. United States

WILBUR K. MILLER, Chief Judge.

For the quarterly periods from October 1,1954, to December 31,1956, the appellants reported to the District Director of Internal Revenue cabaret tax liabilities aggregating $12,535.17 from the operation of their restaurant, and periodically paid the taxes disclosed by their return.

On January 31,1958, the Director notified the appellants he had determined an additional tax liability of $31,660.55 for the nine quarters involved. Negotiations for settlement having failed, an assessment was made and on March 11, 1960, appellants were served with notice and demand for…