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argues that the evidence shows that the Michoff, Srs., freely
transferred moneys and property between themselves and Michoff,
Jr., and that Michoff, Jr., was involved in the sale of drugs
during this period, which resulted in substantial income to
himself and to his family, including the Michoff, Srs.
Respondent contends that the Michoff, Srs., received money from
Michoff, Jr., from his drug business but offers no explanation of
why this would be taxable to the Michoff, Srs. We conclude that
this is not a taxable source of income to the Michoff, Srs.
Respondent did, however, analyze the bank deposits and
expenditures of the Michoff, Srs., to determine the amount of
unreported income. Petitioners have failed to prove that any of
the disputed amounts are from nontaxable sources. Respondent is
sustained on this issue.
Casualty Losses and Telephone Expenses
The Michoff, Srs., claimed miscellaneous itemized deductions
for alleged job required phone usage in the 1989 and 1990 tax
years in the amounts of $264 and $394, respectively. The
Michoff, Srs., admitted on brief that no evidence was provided to
establish the deductions claimed for the alleged job required
phone usage. Petitioners failed to meet their burden of proof,
and therefore respondent's determination regarding the deductions
for phone usage is sustained.
The Michoff, Srs., claimed itemized casualty loss deductions
for the 1989 and 1990 tax years in the amounts of $3,965 and
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