Don C. Reser and Rebecca Jo Reser - Page 13

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          numerous oral and written requests during the audit process, in              
          which he produced the bank notes and the guaranty agreement with             
          Don Test, petitioner did not produce the alleged notes between               
          himself and DRPC until after the statutory notice of deficiency              
          had been issued.                                                             
               DRPC did not make any "loan" repayments to petitioner, and              
          petitioner did not report any interest income with regard to the             
          alleged notes.  Petitioner argues that any interest, principal,              
          or guaranty fees were made "on the account of" petitioner, were              
          for his benefit, and were recorded as a decrease in the amount of            
          indebtedness of the corporation to petitioner.  He argues that               
          any interest due to him from the corporation was treated as an               
          increase in the amount owed to him based on the notes from DRPC              
          to him.  He asserts that the interest charged by the bank was not            
          the same as that charged by him to DRPC, and the difference                  
          between the two interest amounts "represent[s] the guaranty fees,            
          interest, and principal paid by petitioner".  We have no evidence            
          of any accounting whatsoever as to interest paid or owed by DRPC             
          to petitioner.  In evidence is one computer printout of the                  
          general account of DRPC.  Petitioner may have derived these                  
          figures from the register, but he has failed to prove to this                
          Court how he accounted for any separate debt between DRPC and                
          himself.                                                                     
               On its returns, DRPC reflected notes as payable to Frost                
          Bank, not petitioner, despite the fact that it had listed other              




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