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represented both Mr. and Mrs. Walker from March 19, 1990 through April
14, 1993, ceased his representation of them pursuant to leave of this
Court, and then resumed being counsel solely to Mrs. Walker on
February 3, 1994.
On August 30, 1990, Mr. and Mrs. Walker filed a motion to
suppress all evidence obtained from grand jury materials. This Court
denied their motion on February 5, 1992. See Walker v. Commissioner,
T.C. Memo. 1992-54.
Sometime in October 1993, during the course of pretrial discovery
conducted by respondent, Mr. and Mrs. Walker for the first time
asserted that Mrs. Walker had not signed the 1978, 1979, 1980, and
1981 returns. In their responses to certain other interrogatories
served upon them by respondent, they also denied that, during or after
the years in issue, Mr. Walker (1)
transferred any assets of over $500 (other than for certain
automobiles) to Mrs. Walker; and (2) made any gifts to her.
OPINION
Mr. Walker's Unreported Taxable Income
The parties agree that, during 1978 through 1981, Mr. Walker
diverted and received from West Jersey the funds determined in our
findings. They also agree that these diverted funds, less amounts Mr.
Walker used in purchasing cashier checks for Simmel and the boat for
Short, represent unreported taxable income of Mr. Walker for 1978,
1979, 1980, and 1981, except to the extent of additional cash payments
that Mr. Walker can establish were made by him "to (or for the direct
benefit of)" Short and Simmel
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