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With respect to the years in issue, respondent presented
ample evidence linking petitioner to the income from the
settlement checks. Respondent offered checks made payable to
petitioner's law firm which were purportedly endorsed by
petitioner. An income tax deficiency based on petitioner's
failure to report as income one-third of those checks has a
rational foundation. Therefore, the notice of deficiency is
entitled to a presumption of correctness, and petitioner bears
the burden of proving that no part of the checks is includable in
his gross income.
Petitioner disputes respondent's income computation from the
settlement checks. He contends that he could not have earned
substantially more than he reported on his returns throughout the
years in issue. In support of his position, petitioner points
out that he had no asset accumulation or spending which would
suggest he had income greater than he reported. Petitioner
established that his lifestyle was far from extravagant. See
Stewart v. Commissioner, T.C. Memo. 1990-264. Petitioner's call
to “Show me the money” goes unanswered by respondent.
Furthermore, petitioner's explanation of where the money went is
supported by Mr. Markle's report and Mr. Yoon's significant
accumulation of assets.
Petitioner relies heavily on his own testimony. Respondent
frequently reminds this Court that we are not obligated to accept
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