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respondent’s agent identified a number of specific marijuana
sales transactions in which petitioner participated with Posey
and Cunningham in 1985, 1986, and 1987. Based on the information
obtained, respondent’s agent determined petitioner’s related
gross receipts, cost of goods sold, and gross profits.
Petitioners do not dispute that petitioner participated in
marijuana transactions with Posey and Cunningham, and for the
most part petitioners do not dispute certain facts relied on by
respondent in calculating petitioner’s gross receipts, cost of
goods sold, and gross profit therefrom. To the contrary, at both
his criminal trial and his trial herein petitioner generally
admitted to his involvement in the marijuana transactions
described by Posey and by Cunningham.3
Nevertheless, petitioner claims that he did not receive any
net income or profit from the marijuana sales. According to
petitioner, he was merely assisting friends in the purchase and
sale of marijuana. Our view of petitioner’s claim, however, is
stated in Petzoldt v. Commissioner, supra at 697:
There is nothing in the record which would indicate
that petitioner sold marijuana for philanthropic
reasons, expecting no profit for his efforts. Common
sense would dictate the conclusion that anyone who is
in an illegal and dangerous business such as the
dealing of drugs would demand a very large profit for
his enormous risks. * * *
3 The transcripts of petitioner’s July 1992 criminal trial
were admitted into evidence herein.
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