- 32 -
Indeed, we find the testimony of both Mr. Mifsud and Ms. Mifsud
regarding such deposits to be patently incredible.
Based on our examination of the entire record in this case,
we find that respondent has established by clear and convincing
evidence that under the bank deposits method petitioners have
unreported income for each of the years 1992, 1993, and 1994 in
the amounts of $70,323.69, $80,607, and $103,724, respectively.
See Parks v. Commissioner, 94 T.C. at 661.7 We further find on
7 Since respondent has disproved petitioners' alleged
nontaxable source of the bank deposits at issue and thereby has
satisfied respondent's burden of establishing an underpayment for
each of the years at issue, see Parks v. Commissioner, 94 T.C.
654, 661 (1990), we need not address whether respondent has
established a likely source of petitioners' unreported income for
those years, see id. We nonetheless note that we find on the
record before us that respondent has shown by clear and con-
vincing evidence a likely source of that unreported income, viz.,
Spring Hill restaurant. We also believe that The Breakfast Club
at which Mr. Mifsud spent time during the years at issue working,
inter alia, at the cash register was a likely source for at least
some of the unreported income of petitioners for those years.
Crystal & Ryan, Inc., owned The Breakfast Club, and petitioners
owned 51 percent of the stock of that S corporation.
The record establishes that Mr. Mifsud admitted in a credit
application that he submitted to Ford Motor Credit Company, dated
July 16, 1993, that he had, inter alia, (1) gross monthly salary
of $10,833, or $129,996 annually, from Spring Hill restaurant,
and (2) income from two other restaurants, the amount of which
was not stated on that application. Petitioners also admitted in
an application for a line of credit in the amount of $75,000,
dated Oct. 19, 1993, which they submitted to Barnett Bank that
they had, inter alia, (1) gross monthly salary of $9,000 from
three restaurants and (2) other monthly income of $1,800 in the
form of interest, or total annual income of $129,600. Even Mr.
Mamo, petitioners' former son-in-law and the father of petition-
ers' grandchildren, admitted at trial that around 1991, the last
year during which Mr. Mamo worked at Spring Hill restaurant,
(continued...)
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