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underlying deficiencies, petitioners have the burden of proving
respondent's determination incorrect. Rule 142(a); DiLeo v.
Commissioner, 96 T.C. at 869.
Petitioners' position is that they were not "in business"
during the years at issue, that they were preparing in late 1983
for their opening on January 1, 1984, and that, although they may
have sold a few experimental models, they certainly did not make
a profit. They also assert that some of the deposits were
reimbursements for items which they purchased at a discount for
others.
In 1979, petitioners opened their business bank account at
Park Bank and rented space to build marine air conditioners.
They advertised regularly during 1982 and 1983. During 1981,
1982, and 1983, they made regular deposits of business receipts.
We find they were engaged in business activities during the years
at issue. In calculating petitioners' business receipts,
respondent has allowed for nontaxable transfers between
petitioners' bank accounts. Petitioners have presented no
evidence to counter respondent's determinations as to the amounts
of petitioners' receipts. Thus, we sustain those determinations,
except that, since petitioners jointly operated their business
but are considered to be filing their tax returns separately,6
6 Since petitioners failed to file any tax returns for the
years at issue and have filed their petition with the Court, they
are precluded from being treated on the basis of joint return
(continued...)
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