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Respondent contends that one-third of the gross amounts of
the deposits into the Mitsui account (except for checks totaling
$17,500) represent taxable gross receipts of petitioner's law
practice for the 1991 taxable year. Petitioner admits, on brief,
that he omitted this income from checks that were deposited into
the Mitsui account.
Yearend Ledger Adjustments
Respondent determined that petitioner's yearend adjustments
to his general ledger were incorrect. Petitioner contends that
these adjustments were appropriate to account for amounts held in
his client trust account at the Sumitomo Bank which did not
constitute income to petitioner. Petitioner contends that
substantial med-pay balances existed in the client trust account
in each of the years at issue.
Petitioner bears the burden of proving that these
adjustments are appropriate. Rule 142(a). Petitioner relies on
his own testimony that there were substantial amounts of funds in
the general ledger which belonged to medical providers and
doctors which support the adjustments. Petitioner claims that
these adjusting entries are fully supportable in concept and
amount. We disagree. In concept, petitioner is correct that not
all of the funds in this account constitute income. Petitioner's
adjustments excluded 96.8 percent, 84.1 percent, and 91.5 percent
of the yearend client trust account balances in 1989, 1990, and
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