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substantiation. Hradesky v. Commissioner, 65 T.C. 87, 89-90
(1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).
Petitioner testified that he paid wages of $4,200 a year in
1999 and 2000 to each of his two children. Petitioners’ children
were ages 10 and 5 in 1999. Petitioner testified that the
payments to his children were based on what he believed the “law
allowed for, so that they [his children] would not have to file
taxes.”
Petitioner testified that the services provided by his
children included: Riding along on the weekly routes to the
vending machines, putting candy bars into the machines, sorting
the totes full of candy, breaking down the cardboard and sorting
out the recyclable products of waste produced by the business.
The older child also helped with counting money. Petitioner
testified that his children worked approximately 10 hours per
week. Petitioner admitted, however, that he did not know for
sure how often his children worked every week and that he did not
keep any record of their hours.
Petitioner offered into evidence copies of checks and a bank
statement to establish payment of wages to his children.
Petitioner testified that his children were paid once a year at
the end of December. However, the checks made out to his
children were not cashed until at least 2 months later because
there was not enough capital in the business to cash the checks
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