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funds in different places in Texas. They likewise attempted to
conceal the fact that petitioner Rosemarie Wolfe was the owner of
Deli, Etc., where some of the funds from Spring Branch went.
They did not disclose any taxable income for the years in
question, and they filed no income tax returns for those years.
Petitioners fraudulently failed to report any income or pay
the required tax thereon for 1984, 1985, and 1986. As to the
statutory notice of deficiency herein, petitioners contest only
the inclusion in their gross income of their illegally acquired
receipts from Spring Branch, as well as the additions to tax.
We consider first the correctness of the deficiencies in
tax.
In general, the burden of proof is on petitioners to prove
that respondent's determination, as set forth in the notice of
deficiency, is incorrect. Rule 142(a); Welch v. Helvering, 290
U.S. 111 (1933). Petitioners have admitted the receipt of the
income in question. Petitioners contend that the money received
from the Spring Branch checks was not embezzlement income, but
rather a loan. There is not a scrap of evidence in this record
to support that argument. Neither petitioner testified, nor did
any witness appear on their behalf. They pled guilty, both
criminally and civilly, to the receipt of the money that
respondent would tax to them here. Gross income includes income
from all sources, section 61(a). It is well established that
illegal gain can be taxable income, as in the case of other
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