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possession, he gave it to Ms. Davis. Despite three separate
requests for investment accounts, Ms. Davis discovered one of the
investment accounts herself when she was reviewing certain
canceled checks. On one of these checks, she saw the name
"Shearson Lehman". When asked about the investment accounts, Mr.
Bruno told her there was an investment account with Shearson. He
further stated that he believed all of the money in the Shearson
account represented transfers from petitioner's checking account.
This categorization of the Shearson deposits as transfers from
the checking account was significant because, if accurate, they
would have represented nontaxable income already considered as
income by Ms. Davis in her review of the account.
Petitioners' 1987 income tax return did show interest
received from Shearson. Ms. Davis did not receive an IRP
document, which is a document internally processed by the Service
and lists interest income, capital gains, et cetera, reported to
the Service. However, neither the interest amount reported on
the return nor the IRP document would have provided or given
access to the detailed statements. Without these detailed
statements, Ms. Davis would not have been able to determine
whether income had been deposited or withdrawn from that account,
and whether the interest income or capital gains were earned from
moneys placed in the account 10 years before or during the same
year.
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