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introduce any invoices or other records to establish a business
purpose for the payments.
The expert report prepared by petitioners’ expert for
purposes of this litigation is based largely on out-of-court
statements purportedly made by petitioner regarding checks
written on the Lloyds/Sanwa account. Other than petitioner’s
testimony, no trial testimony or other documentary evidence was
offered or admitted at trial to establish the purpose of the
checks.
Although we allowed petitioners' expert’s report into
evidence, much of the information relied upon by petitioners’
expert is vague and so speculative as to make his report largely
meaningless. Soden v. Freightliner Corp., 714 F.2d 498, 500-507
(5th Cir. 1983); United States v. Sims, 514 F.2d 147, 149-150
(9th Cir. 1975); Viterbo v. Dow Chem. Co., 646 F. Supp. 1420,
1424 (E.D. Tex. 1986), affd. 826 F.2d 420 (5th Cir. 1987).
Further, under rule 703 of the Federal Rules of Evidence,
petitioners' expert’s reliance on hearsay in his report does not
elevate the hearsay to the status of evidence that would
establish the truth of the matter asserted (namely, the business
nature and deductibility of alleged expenses mentioned therein).
Paddack v. Dave Christensen, Inc., 745 F.2d 1254, 1261-1262 (9th
Cir. 1984); Greenberg v. United States, 295 F.2d 903, 907-909
(1st Cir. 1961).
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