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engaged in an income-producing business, and (2) that regular
deposits of funds having the appearance of income were made to
bank accounts during the course of business. After the
Government has made this showing and given the taxpayer credit in
the income computation for any clearly identified nontaxable
sources, the taxpayer has the burden to explain "as far as
possible" the nature of the deposits.
No credible evidence was introduced to support Kanter's
assertion that the deposits were loans. The bank deposit slips
did not indicate the source and nature of the payments. Although
Kanter produced a summary analysis regarding the deposits and his
check register containing notations that certain deposits were
loans, the underlying documents pertaining to the purported loans
were not provided. No promissory notes and no journals or
ledgers with respect to interest payments are extant. Kanter's
self-serving testimony is not persuasive in view of the dubious
accounting techniques used by Administration Co. and Kanter's
failure to produce the necessary documents to establish that
there were loans. We find the testimony of the accountant,
Gallenberger, unreliable and her analysis fatally flawed because
she did not rely on the source documents for the purported loans.
She did not review the records of any entities to or by which the
purported loans were made. Moreover, the use of schedules and a
summary analysis prepared for trial further lacked credibility in
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