- 17 -
As indicated, the record does not establish that petitioner
used any managed accounts funds that were deposited into the bank
accounts in his name for personal purposes. There is no evidence
that such funds were used by petitioner to take vacations,
purchase extravagant items, or entertain himself or others. We
note that petitioners reported on their tax returns significant
salary income for the years in issue, and the evidence
establishes that much of this salary income was deposited into
the bank accounts in petitioner’s name and that the amount of
petitioners’ salary deposits appears to have been sufficient to
support petitioners’ lifestyle.
Based on the evidence before us, and for purposes of our
decision as to petitioner’s liability for the fraud additions to
tax, on which respondent has the burden of proof by clear and
convincing evidence, we conclude that respondent has not
established that petitioner was not an agent for GSC in his
receipt of managed account funds, nor that petitioner embezzled
or misappropriated for his personal use any managed account funds
during 1984, 1985, and 1987. Accordingly, for purposes of the
fraud additions to tax, we conclude that managed account funds
deposited into the bank accounts in petitioner’s name should not
be treated as taxable income to petitioner.
For 1984, 1985, and 1987, because respondent has not
established by clear and convincing evidence that petitioner
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011