Estate of Leon Spear, Deceased, Jeannette Spear, Harvey Spear, and Robin Spear, Administrators, and Jeannette Spear - Page 5

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          increased dramatically during the years in issue.  He concluded             
          that the decedent and Mrs. Spear skimmed cash from the parking              
          lot businesses and used corporate funds for their personal                  
          benefit without reporting them as income.                                   
               Trepple attended the decedent's and Mrs. Spear's criminal              
          trial in December 1982 and January 1983.  During that trial, the            
          decedent and Mrs. Spear claimed for the first time that the                 
          decedent's father, Abe Spear, had given the decedent $380,000 in            
          cash in 1957.  The decedent testified about his father's will,              
          the will contest, and the fact that his father pawned family                
          jewelry and borrowed money, including $1,000 from the decedent's            
          sister, Sadie.                                                              
          C.   Notice of Deficiency                                                   
               Respondent issued the notice of deficiency in this case on             
          December 23, 1986.  On February 6, 1987, the decedent and Mrs.              
          Spear filed a petition in this Court.  Petitioners did not                  
          contest respondent's use of the net worth method or respondent's            
          net worth computation, except they contended that they had more             
          opening cash on hand than respondent allowed, and that payments             
          to them from their closely held corporations were nontaxable loan           
          repayments.  Petitioners also disputed that they were liable for            
          the addition to tax for fraud.                                              

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