Lucila Novoa - Page 17

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               Insofar as petitioner's testimony implied and was intended             
          to convey the impression that she reported all her income on her            
          1993 return, we find her testimony improbable and questionable,             
          in light of respondent's reconstruction evidencing the receipt of           
          income exceeding the amounts petitioner received from Cappy's.              
          See Demkowicz v. Commissioner, 551 F.2d 929, 931 (3d Cir. 1977)             
          (this Court is not bound to accept taxpayer's testimony if it               
          finds it to be either improbable, unreasonable, or questionable),           
          revg. T.C. Memo. 1975-278; Sundel v. Commissioner, T.C. Memo.               
          1998-78.                                                                    
               Petitioner further argues that respondent overlooked several           
          nontaxable sources of income for the year in issue.  Petitioner             
          contends that the inclusion of such amounts overstated                      
          respondent's determination of her unreported income.                        
          Specifically, petitioner testified that after she moved out of              
          her apartment, her daughter Emelina continued to live in the                
          apartment from April through December 1993.  Petitioner continued           
          to pay the rent on the apartment for those 9 months.  We find               
          that Emelina reimbursed petitioner for the rent on the apartment            
          for those 9 months in the amount of $319 per month, totaling                
          $2,871 for the 1993 year.                                                   
               Petitioner also testified that her daughter Jennifer, who              
          lived with her and worked part time at the Drug Festival, Inc.,             
          would cash her paycheck, keep $5 and give the remainder to her              
          mother.  Jennifer testified at trial about her practice of                  



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