- 14 -
has knowledge. DiLeo v. Commissioner, supra at 868. However,
the Commissioner is not required to show that all deposits
constitute taxable income. Estate of Mason v. Commissioner,
supra at 657; Gemma v. Commissioner, 46 T.C. 821, 823 (1966).
Consequently, in analyzing a bank deposit case, deposits are
considered income when there is no evidence that they represent
anything other than income. Price v. United States, 335 F.2d
671, 677 (5th Cir. 1964); United States v. Doyle, 234 F.2d 788,
793 (7th Cir. 1956). The burden of showing duplications is on
the taxpayer. Zarnow v. Commissioner, 48 T.C. 213, 216 (1967).
For 1987, respondent determined that petitioner and Ms.
Murphy received gross receipts from Pieces of Eight, incurred
cost of goods sold and other deductible expenses, and realized
gross income from the business in the following amounts:5
Gross Cost of Goods Sold Gross
Receipts and Other Deductions Income
$279,944 $187,478 $92,466
5
Respondent also eliminated from the taxable income of
petitioner and Ms. Murphy the $20,000 of wage income reported on
the 1987 return purportedly paid them by Pieces of Eight.
Respondent did so on the grounds that petitioner and Ms. Murphy
could not receive wage income from the business because they were
its owners. In the computations with respect to Pieces of Eight,
respondent allowed no deduction for the wages. Consequently, the
amount was treated as income derived by petitioner and Ms. Murphy
from Pieces of Eight that was reportable on Schedule C of the
return.
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