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deposits or disproves nontaxable sources alleged by the taxpayer.
Parks v. Commissioner, 94 T.C. 654, 661 (1990); see Armes v.
Commissioner, 448 F.2d 972, 974-975 (5th Cir. 1971), affg. in part,
revg. in part and remanding T.C. Memo. 1969-181.
Funds received by a taxpayer as a mere agent or conduit of a
corporation are not treated as taxable income. See Estate of
Lashells v. Commissioner, 208 F.2d 430, 435 (6th Cir. 1953), affg. in
part, revg. in part and remanding a Memorandum Opinion of this Court;
Rehtorik v. Commissioner, T.C. Memo. 1996-532; Ishijima v.
Commissioner, T.C. Memo. 1994-353.
Respondent has the burden to prove fraud by clear and convincing
evidence and the burden to prove an omission of more than 25 percent
of gross income by a preponderance of the evidence. Sec. 7454(a);
Rule 142(b); Peters v. Commissioner, 51 T.C. 226, 230 (1968).
On the basis of our findings of fact as to the source and the
use of the funds that petitioner received during the years in issue,
in the paragraphs below we first explain our conclusions as to the
taxability to petitioner of each of the disputed bank deposits in the
cumulative amount of $45,458 for 1987 (see supra p. 21) and of
$44,884 for 1988 (see supra p. 22), and the $10,677 in disputed
checks not deposited into petitioner's bank accounts for 1987 (see
supra p. 21). We then explain our conclusions as to the taxability
to petitioner of cash withdrawals from the Club, the receipt of the
stock of 2618 Inc, and petitioner's liability as guarantor of the
$705,000 debt obligation to TexCommBk.
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