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Increased Deficiency and Additions to Tax
With respect to the increased deficiencies and increased
additions to tax claimed in the answer, respondent bears the
burden of proof. Rule 142(a); Achiro v. Commissioner, 77 T.C.
881, 889-990 (1981); DeSantis v. Commissioner, T.C. Memo. 1997-
141. Respondent presented evidence in support of the claim.
In February 1989, petitioner executed an application and
agreement to become an independent distributor for Matol. In
November 1991, petitioner submitted an application for
registration of a fictitious name, Staying Young Unlimited, with
the Division of Corporations, State of Florida. The registration
documents reflect that the mailing address of the business is the
same as that of petitioner's residence. About the same time,
petitioner advised Matol of the name change and asked Matol to
issue all compensation and royalty checks in the name of Staying
Young Unlimited. Petitioner further advised Matol that Staying
Young Unlimited had its own tax identification number.
During the taxable year 1993, Matol, as payor, issued 21
checks in the name of Staying Young Unlimited totaling
$84,436.34. The checks were deposited to an account controlled
by petitioner at the Barnett Bank in Florida. The $84,436.34
represents commissions earned by petitioner from a network
marketing system operated by Matol.
Petitioner failed to file a Federal income tax return for
the taxable year 1993, and he failed to report any income or
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Last modified: May 25, 2011