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outstanding checks. Respondent argues that she has been
consistent in her treatment of the outstanding checks over the
years in issue and that, in any event, the treatment sought by
petitioners would result in a "wash".
Generally, bank balances are reduced by outstanding checks.
See Lanier v. Commissioner, T.C. Memo. 1966-14. However, we
cannot be certain that all outstanding checks have been
identified for each of the years in issue. At trial, both
Caufield and the revenue agent testified that the check registers
and all canceled checks and bank statements from petitioners'
various accounts were not presented during the examination of
petitioners' returns. Furthermore, petitioners have not
presented evidence regarding any outstanding checks as of
December 31, 1988. This information would be necessary for
consistency in the net worth computations. Respondent's
determination of petitioners' bank account balances will be
sustained.
Petitioners also argue that respondent erred in including
the bank accounts of petitioners' children in petitioners' net
worth. At trial, the revenue agent testified that it appeared
that deposits into the children's accounts included business
receipts. Yoon testified at trial that neither of petitioners
deposited business money into their children's bank accounts and
that family gifts generally made up any deposits into the
accounts. Yoon also testified, however, that his wife received a
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