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Year Amount
1993 $517,236
1994 477,903
1995 333,780
Respondent allowed petitioners’ business deductions for the
roofing business that were claimed on petitioners’ joint Federal
income tax returns.
Respondent also determined, for each year, that petitioners
were liable for the fraud penalty under section 6663. In the
alternative, for each year, respondent determined that
petitioners were liable for the accuracy-related penalty under
section 6662.
As a protective measure, on audit of Delwin Houser for 1993,
1994, and 1995, respondent charged to Delwin Houser the same
total amounts of unreported income relating to the bank deposits
that were charged to petitioners.
OPINION
Under section 61, gross income includes all income from
whatever source derived. See Commissioner v. Glenshaw Glass Co.,
348 U.S. 426, 431 (1955). Taxpayers are required to maintain
sufficient records to allow respondent to determine their correct
Federal income tax liability. See sec. 6001.
Generally, respondent’s determinations are presumed correct,
and taxpayers have the burden of proving that respondent’s
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