- 7 -
is not required to trace deposits to their source. Petzoldt v.
Commissioner, supra at 695-696; Estate of Mason v. Commissioner,
supra at 657.
Respondent's revenue agent analyzed petitioners' bank
accounts. She took the net deposits shown on the bank
statements, added back any cash withheld, and subtracted out any
deposits that were identifiable as nontaxable.
Petitioners argued at trial5 that their check registers show
their gross income. We find the check registers to be unreliable
as they do not tie in with petitioners' bank statements.
Petitioners conceded at trial that they did not report any income
from magic shows or band activities. Petitioners further argue
that the cash deposits into their bank accounts are not income
because the cash came from other bank accounts. Petitioners,
however, have offered no proof to support their claim other than
vague, uncorroborated testimony. Petitioners failed to prove
that respondent's reconstruction of income is incorrect. Rule
142(a). Therefore, we sustain respondent's determination on this
issue.
B. Deduction for Mileage
Petitioners admitted that their auto logs were estimates and
not contemporaneously made, as required by section 1.274-
5(c)(2)(ii)(a), Income Tax Regs. Respondent allowed petitioners'
5 Petitioners' brief consists of a two-page letter in which
they assert that no additional tax is owed. The mileage and
negligence issues are not addressed.
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