Colin Kelly and Sharon K. Kaufman - Page 5
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US Tax Court > 2001 > Colin Kelly and Sharon K. Kaufman - Page 5
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Hart, Inc. v. Commissioner, 456 F.2d 145, 148 (6th Cir. 1972),
affg. T.C. Memo. 1970-335; Stein v. Commissioner, 322 F.2d 78, 82
(5th Cir. 1963), affg. T.C. Memo. 1962-19, or if the totality of
the evidence conveys a different impression, see Diamond Bros.
Co. v. Commissioner, 322 F.2d 725, 731 (3d Cir. 1963), affg. T.C.
Petitioners argue that respondent erroneously included funds
deposited into their trust account as income during the years in
issue. The revenue agent testified in detail that only transfers
from the trust account and other deposits into petitioners’
business or personal accounts were included in respondent’s
reconstruction. We accept this testimony, which is not
controverted in any way.
Petitioners concede that they did not maintain books that
would distinguish between earned fees and unearned retainers.
They belatedly claim that the schedules provided to the revenue
agent during the audit were lists of all receipts, rather than
lists of income received. They argue that the requirement of
Texas law that they maintain retainers in a separate trust
account somehow excuses their failure to keep the amounts
segregated or to provide written agreements to their clients.
Their arguments assume, contrary to the evidence, that identified
amounts were shown to be clients’ funds.
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