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Petitioners also rely on the fact that the Lees hired a law
firm allegedly to recover the stolen funds. We give this fact
little weight. The law firm merely mailed demand letters to
Mr. Won and his brother, and neither the firm nor the Lees took
any meaningful steps, after these letters were mailed, to recover
the amounts claimed stolen. The Lees, for example, could have
(but did not) seek criminal charges against Mr. Won or his
brother with respect to the alleged theft. The Lees also could
have (but did not) make a claim on Hamalee's then-existing
insurance policy. While we can understand the delicate and
difficult familial situation that the Lees may have faced with
regard to criminally prosecuting their daughter's husband with
respect to this purported matter, we cannot excuse the lack of
evidentiary support for the claimed thefts. Petitioners have not
convinced us that these "thefts" occurred.
Because petitioners have failed to disprove respondent's
determination on this issue, we sustain it.
3. Unreported Cash Expenditures
Petitioners argue that Hamalee may deduct certain cash
expenditures that were made in each year in issue, but for which
Hamalee did not claim a deduction on its corresponding tax
returns. Petitioners allege that these cash expenditures were
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