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Insofar as petitioner's testimony implied and was intended
to convey the impression that she reported all her income on her
1993 return, we find her testimony improbable and questionable,
in light of respondent's reconstruction evidencing the receipt of
income exceeding the amounts petitioner received from Cappy's.
See Demkowicz v. Commissioner, 551 F.2d 929, 931 (3d Cir. 1977)
(this Court is not bound to accept taxpayer's testimony if it
finds it to be either improbable, unreasonable, or questionable),
revg. T.C. Memo. 1975-278; Sundel v. Commissioner, T.C. Memo.
1998-78.
Petitioner further argues that respondent overlooked several
nontaxable sources of income for the year in issue. Petitioner
contends that the inclusion of such amounts overstated
respondent's determination of her unreported income.
Specifically, petitioner testified that after she moved out of
her apartment, her daughter Emelina continued to live in the
apartment from April through December 1993. Petitioner continued
to pay the rent on the apartment for those 9 months. We find
that Emelina reimbursed petitioner for the rent on the apartment
for those 9 months in the amount of $319 per month, totaling
$2,871 for the 1993 year.
Petitioner also testified that her daughter Jennifer, who
lived with her and worked part time at the Drug Festival, Inc.,
would cash her paycheck, keep $5 and give the remainder to her
mother. Jennifer testified at trial about her practice of
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