- 18 -
With respect to taxable year 1985, respondent has not
carried her burden in establishing the existence of an
underpayment. Respondent cannot rely on petitioner's failure to
establish a nontaxable source for the bank deposits discussed
earlier in this opinion in order to satisfy her burden. Otsuki
v. Commissioner, supra. Instead, if the bank deposits are to be
considered in determining whether an underpayment exists,
respondent must establish by clear and convincing evidence that
such deposits were unreported income. She has not done so.
Hence, in determining whether an underpayment exists, the bank
deposits may not be considered. Therefore, because the amount of
the additional charitable deduction conceded by respondent for
taxable year 1985 exceeds the unreported interest income conceded
by petitioner for that year, we find that respondent has not
established by clear and convincing evidence that an underpayment
exists for taxable year 1985.
Respondent has also failed to establish the existence of an
underpayment for taxable year 1986. As is the case for taxable
year 1985, and for the same reasons, the bank deposits cannot be
considered when determining whether an underpayment exists for
taxable year 1986. Accordingly, because the amount of the
additional charitable deduction conceded by respondent for
taxable year 1986 exceeds the unreported interest income conceded
by petitioner for that year, we find that respondent has not
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011