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the existence of the loans or the repayment thereof, petitioner
must include the $2,500 and $16,275 deposits in his income for
1985 and 1987, respectively.
Moreover, petitioner contends that in 1987 he paid $3,500 to
his attorney, William T. Bogue, for services, that Mr. Bogue
endorsed the check to petitioner, petitioner gave Mr. Bogue
$3,500 cash, and petitioner deposited the check in petitioner's
account. Petitioner introduced into evidence a copy of a bank
statement and deposit ticket for the $3,500 deposit but did not
introduce any evidence proving that the $3,500 cash petitioner
paid to Mr. Bogue came from his ACB account. Under United States
v. Boulet, 577 F.2d 1165, 1167 (5th Cir. 1978), in a bank
deposits method of proof case, deposits are added, nontaxable
deposits are eliminated, and cash expenditures are added to
derive gross income. Since petitioner did not prove that the
$3,500 cash originated from his bank account, the $3,500
redeposit would decrease taxable income, but the cash expenditure
of $3,500 would increase taxable income in a like amount.
Accordingly, petitioner must include the $3,500 deposit in his
1987 income.
Petitioner also claims that in 1987, he paid Mr. Bogue by
transferring his car ownership to Mr. Bogue; that Mr. Bogue
refunded to petitioner the $2,200 difference between the value of
the car and the value of Mr. Bogue's services; and that
petitioner deposited the $2,200 check in his ACB account.
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