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The Witness: I have not, no.
The notice of deficiency was issued before petitioner
advised respondent of the existence of the Note. The parties
agree that if the Note was in fact issued to Mr. Petar before the
close of FYE 5/31/90, then respondent’s disallowance of the bonus
deduction for FYE 5/31/90 was erroneous. Petitioner bears the
burden of proof. Rule 142(a).
Petitioner relies on the aforementioned testimony of
Mr. Petar and his family and petitioner’s accountant. There is
no evidence in the record that directly contradicts their
account. Although this Court will not discount uncontradicted
testimony on behalf of the taxpayer merely because it is
self-serving, the testimony will not satisfy the taxpayer’s
burden if it is improbable, unreasonable, or questionable. Cf.
Loesch & Green Constr. Co. v. Commissioner, 211 F.2d 210, 212
(6th Cir. 1954), revg. and remanding a Memorandum Opinion of this
Court dated Dec. 11, 1952, with Conti v. Commissioner, 39 F.3d
658, 664 (6th Cir. 1994), affg. and remanding 99 T.C. 370 (1992);
Lerch v. Commissioner, 877 F.2d 624, 631 (7th Cir. 1989), affg.
T.C. Memo. 1987-295; Commissioner v. Smith, 285 F.2d 91, 96 (5th
Cir. 1960), affg. Griffin v. Commissioner, T.C. Memo. 1958-210.
We find the witnesses’ account of the Note to be unpersuasive for
several reasons.
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