- 33 -- 33 -
petitioners' accounts were made during the years at issue.21
However, petitioners did not attempt to introduce those documents
into evidence. Nor did they proffer as a witness their accoun-
tant, Mr. Bernard, who purportedly assisted petitioners with the
preparation of those schedules.
On the record before us, we find that during 1989 and 1990
petitioners made payments to, or on behalf of, K & H in the
amounts of $481,051.62 and $56,155.40, respectively. We further
find on that record that the aggregate amount of deposits into
petitioners' accounts during 1989 and 1990 of K & H's and Ms.
Velilla's funds exceeded the payments that petitioners made to,
or on behalf of, K & H and Ms. Velilla during each of those years
by $90,666.35 and $60,168.06, respectively.
With respect to the second dispute between the parties as to
whether the deposits that were not returned are includible in
21 Petitioners claim that certain other records and books, which
related to petitioner's sole proprietorship and petitioners'
other financial activities during the years at issue and which
would have assisted them in preparing petitioners' schedules of
expenses and petitioners' schedules of deposits, were acciden-
tally discarded during 1991 and that they had difficulty in
obtaining certain bank records from Washington Federal that would
have assisted them in preparing those schedules. Assuming
arguendo that petitioners' books and records were, in fact,
accidentally discarded and that they had difficulty in obtaining
certain records from Washington Federal, petitioners would still
have to satisfy their burden of proof. See Malinowski v. Commis-
sioner, 71 T.C. 1120, 1125 (1979). Under such circumstances,
petitioners would be able to meet that burden by presenting
reliable secondary evidence. Id. As stated above, we did not
find petitioners' schedules of expenses or Ms. Harp's testimony
regarding those schedules to be reliable.
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