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and payable to Michoff, Jr. Michoff, Jr., then endorsed the
check over to the Dickersons. This money was given to the
Dickersons by Michoff, Jr., either as a gift or as a loan and is
not therefore taxable to the Dickersons.
Respondent identified gambling as a source of the
Dickersons' additional income. Dorothy Dickerson loves to
gamble. Dorothy Dickerson could not identify what amounts she
won and lost at gambling.
Respondent further contends that the Dickersons engaged in
transactions with Michoff, Jr., from whom they received moneys
and with whom they freely transferred property. Respondent
contends that Michoff, Jr., had sources of income which included
a lucrative activity of selling drugs. Respondent has not made
any preliminary showing of why income from a drug selling
activity of Michoff, Jr., should result in income to the
Dickersons. However, respondent has shown gambling to be a
possible source of additional income which is sufficient to
satisfy respondent's initial burden of connecting the Dickersons
to an income-producing activity. Furthermore, even without this
showing, respondent has met her minimal evidentiary burden by
performing a bank deposits analysis.
With respect to all items except the $5,500 deposit,
petitioners have failed to show that the source of the funds was
nontaxable. Respondent's determination is sustained as to all
amounts above the $5,500.
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