Question: When is it least appropriate to use an indirect method for income reconstruction? 1. The person or entity of interest has adequate books and records.

When is it least appropriate to use an indirect method for income reconstruction?
1. The person or entity of interest has adequate books and records.
2. Gross profit percentages appear to change significantly from period to period.
3. There are few or no original invoices or other supporting documentation.
4. There are missing check numbers and checks for supporting documentation.

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