James K. Roberts - Page 11

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          account a check in the amount of $2,870 received from Cutlass               
          Reality Syndication (Cutlass).  The check is annotated: “For                
          Phone”.                                                                     
               Petitioner testified that the check was to reimburse him for           
          having a cellular phone installed in an automobile purchased by             
          Cutlass, a customer of Rallye Motors.  Petitioner testified that,           
          in 1988, it was hard to find the specific type of phone that                
          Cutlass wanted, he knew where to get one, Cutlass gave him a                
          check for the approximate amount of the phone, and he got Cutlass           
          the phone.  Petitioner’s testimony was uncorroborated.                      
          Petitioner provided no receipt for his purchase of a phone, nor             
          did he provide any evidence of the work to install the phone.               
          Moreover, petitioner neither called anyone from Cutlass to                  
          testify nor explained his failure to do so.  We infer from those            
          failures that any testimony from Cutlass would have been negative           
          to petitioner.  McKay v. Commissioner, 886 F.2d at 1238; Wichita            
          Terminal Elevator Co. v. Commissioner, 6 T.C. at 1165.                      
          Petitioner has failed to prove that the $2,870 deposit to the               
          Chase account was a reimbursement for an amount expended on                 
          account of Rallye, and we so find.  The deposit remains                     
          unexplained and, thus, is an item of gross income to petitioner.            
          Tokarski v. Commissioner, 87 T.C. at 77.   Accordingly, we                  
          sustain respondent's determination of a deficiency as it relates            
          to that item.                                                               






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