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decedent retained an interest in the funds, and the amounts were
properly includable in the gross estate.
Petitioner has not carried its burden of proof. Although it
claims that Marsha and Linda paid for decedent's hairdressers,
doctors, housekeepers, doormen, moving people, and manicurists,
it has not produced any records to substantiate its claim. It
produced no cancelled checks or receipts. Moreover, neither
Marsha nor Linda could recall whether they had actually spent
$25,000 each. In fact, Linda testified that decedent intended
that some of the money was to be used for future outlays.
Therefore, we reject petitioner's argument and find that the
transfers were not reimbursement for expenditures made on behalf
of decedent.
We also reject petitioner's alternative argument that the
transfers qualified as gifts. The purported gifts fail due to an
absence of sufficient evidence of decedent's intent and Marsha's
lack of authority to make a gift. Accordingly, we sustain
respondent's determination that the value of funds (i.e.,
$50,000), represented by the $25,000 checks paid to Marsha and
Linda, is includable in the gross estate pursuant to section
2033.
III. Accuracy-related Penalty for Negligence Under Section 6662
Respondent contends that petitioner was negligent in
understating its tax liability. Section 6662(a) imposes a
penalty in an amount equal to 20 percent of the portion of the
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