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facts and circumstances of the case. Giddio v. Commissioner,
54 T.C. 1530, 1532-1533 (1970).
When the taxpayer's records are incomplete, the Commissioner
may look to the bank deposits method as evidence of income.
Nicholas v. Commissioner, 70 T.C. 1057, 1064 (1978); Estate of
Mason v. Commissioner, 64 T.C. 651, 656 (1978), affd. 566 F.2d
2 (6th Cir. 1977). The propriety of this method is well
grounded. Parks v. Commissioner, 94 T.C. 654, 658 (1990);
Nicholas v. Commissioner, supra at 1064; see also Estate of Mason
v. Commissioner, supra at 656-657; Harper v. Commissioner,
54 T.C. 1121, 1129 (1970). Although not conclusive, bank
deposits are prima facie evidence of income. Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986); Estate of Mason v.
Commissioner, supra at 656-657.
Petitioners argue that the questioned deposits in the bank
accounts bearing their names are moneys lent to them from foreign
individuals and a foreign corporation to invest in the United
States. Petitioners claim that they received loans totaling
$280,320 in 1990 and $2,719,680 in 1991. Respondent argues that
petitioners failed to present credible evidence at trial to
support their claim.
We agree with respondent. In an attempt to support their
claim, petitioners elicited testimony from themselves, Mr. Chu's
mother and father, and various friends of the family to the
effect that the disputed deposits were loans. We find none of
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