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or business. Petitioner did not assist Mr. Makalintal in any
meaningful way in any of the income-producing activities of his
businesses or corporations.
Petitioner was not aware of Mr. Makalintal’s sale of his
ICPI stock. Mr. Makalintal did not disclose to petitioner the
source of the funds that were deposited into their bank accounts.
Petitioner reviewed the 1986, 1987, and 1988 Federal income
tax returns, and she specifically inquired of Mr. Makalintal how
the income reported thereon could support their lifestyle. Based
on her discussions with Mr. Makalintal about the 1986, 1987, and
1988 joint Federal income tax returns, petitioner reasonably
believed that funds that Mr. Makalintal had earned in prior years
from his businesses and investments in the Philippines
constituted the funds that were being used to support the
family’s lifestyle. Petitioner credibly testified in this
regard.
Petitioner's acceptance of Mr. Makalintal's explanation was
reasonable in light of the high standard of living they had
experienced in the Philippines and the apparent success of
Mr. Makalintal’s businesses and investments in the Philippines.
Ms. Yue and Ms. Yue’s supervisor accepted the same explanation
from Mr. Makalintal.
During 1986, 1987, and 1988, Mr. Makalintal and petitioner’s
standard of living remained consistent with prior years.
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