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taxpayer's income from prostitution. Cooper v. Commissioner,
T.C. Memo. 1987-303.
In cases of unreported illegal income, respondent must
establish that the deficiency determination is supported by a
proper foundation of substantive evidence. Weimerskirch v.
Commissioner, 596 F.2d 358, 362 (9th Cir. 1979), revg. 67 T.C.
672 (1977). In this case, petitioner admits that the source of
his income was from Stardust. Only the amount of income is in
dispute.
Respondent substantiates her assertion of unreported income
with the calendars, the purported business records of Stardust,
the evidence of petitioner's expenditures not explained by
reported income, and testimony of petitioner and several of the
models. Respondent maintains that petitioner's business records
are inaccurate representations of the number of models' sessions.
Petitioner argues that the transcribed business records are
accurate and that they bear resemblance to the originals
sufficiently to show that petitioner is not liable for additional
tax. Petitioner argues that he had the originals copied because
they were stained with coffee or cola and that the originals
"turned up missing" after the police executed a search warrant at
Stardust.
At the criminal trial and at trial of this case, various
models testified consistently about walk-in customers, length of
sessions, triangle sessions, and outcalls. Their testimony was
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