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years at issue. Petitioners contend that $9,000 of the $14,000
at issue was received in the form of a loan from petitioner Bui's
friend, Mr. Tu Van Le, and was intended for working capital
purposes. Petitioners further contend that the remaining $5,000
at issue was received from petitioner Bui's sister and was also
intended for working capital purposes. These alleged loans were
not formalized or documented in any fashion; no instrument
evidences their existence. Petitioners did not call Mr. Tu Van
Le or petitioner Bui's sister to testify as to these loans.
Furthermore, their absence was not explained. We cannot assume
that the testimony of absent witnesses would have been favorable
to petitioners. Indeed, the normal inference is that it would
have been unfavorable. Pollack v. Commissioner, 47 T.C. 92, 108
(1966), affd. 392 F.2d 409 (5th Cir. 1968).
Except for petitioner Bui's self-serving testimony,
petitioners have produced no evidence that the two deposits
totaling $14,000 in 1988 constituted nontaxable income. Hence,
petitioners have not overcome the presumption that the two
deposits originate from a taxable source as respondent
determined. Accordingly, respondent's determination is
sustained.
Issue 4. Addition to Tax, Sec. 6653(a)
Respondent determined that petitioners are liable for an
addition to tax under section 6653(a) because the underpayment of
income tax for taxable year 1988 was attributable to negligence
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