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contain notations that indicate that such checks constitute
payment for services rendered.2
Petitioner's sole argument is that respondent has failed to
carry the burden of proof.3
We agree with respondent but only with respect to the checks
drawn by Nancy Burley (Ms. Burley) and Judith White (Ms. White).
There is little doubt that the bank account involved in this case
was a "business" account. However, establishing that petitioner
deposited the checks at issue into a business account is not
sufficient to satisfy respondent's burden, and it does not
convince us that the deposits were likely made from a taxable
source of income. But the size and frequency of the checks drawn
by Ms. Burley indicate a regular source of cash which is
consistent with the operation of a service-oriented business,
such as a bookkeeping service. Moreover, nine of the checks
drawn by Ms. Burley were made payable to "Madigan and Company,"
or a variation thereof, and not to petitioner personally.
Additionally, eight of the checks drawn by Ms. Burley contain
notations that suggest that such checks were issued as payment
2Respondent advances several other arguments in support of
the contention that the deposits at issue represent taxable
income to petitioner. However, because these arguments are
significantly less persuasive than respondent's arguments with
respect to the type of account involved, the payee, and the
markings contained on the checks at issue, we decline to discuss
them.
3Petitioner does not address the individual deposits at
issue and does not contend that such deposits stem from a
nontaxable source.
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Last modified: May 25, 2011