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petitioners because Polymer and Chemical Traders had no business
purpose, petitioner controlled the Polymer and Chemical Traders
bank accounts, and petitioner could and did use those accounts
for his benefit. As discussed above, respondent's determination
is presumed to be correct, and petitioners have not proven
otherwise.
6. Constructive Dividends for 1970
Respondent determined that petitioners did not report the
following income in 1970: $5,371 from Polymer, $15,600 from
Chemical Traders, $4,910 from Factory Expense, and $41,095 from
Van Syckle Chemical Plant. In 1970, petitioners reported $27,300
of income without identifying the source. Petitioners contend
that we should reduce any constructive dividend for 1970 by
$27,300 because they reported that amount, which represents their
estimate of the value of Chemical Traders and Polymer Chemicals
transactions on their 1970 return. We disagree. Petitioners did
not show how the $27,300 they reported related to any of the
amounts respondent determined to be unreported income. They rely
on Goldstein's testimony that it was to cover income adjustments
from respondent's audit for 1970. Goldstein's testimony does not
prove respondent's determination to be incorrect because it does
not show how the reported income of $27,300 relates to any of
respondent's adjustments for 1970.
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