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of a witness if we find it to be unworthy of belief. Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986). We decide whether a witness
is credible based on objective facts, the reasonableness of the
testimony, and the demeanor of the witness. Quock Ting v. United
States, 140 U.S. 417, 420-421 (1891); Wood v. Commissioner, 338
F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C. 593 (1964).
Mr. Tyler may have been attempting to support the tax
returns he prepared. He did not do so. There was nothing in the
documents detailing the wire transfers which tied them to
petitioners. Mr. Tyler had no written records of his own to
prove he held funds in trust for petitioners or that moneys
flowed in and out of the purported trust account. We found the
statements of Mr. Tyler to be unreasonable and not consistent
with normal business practices. We observed Mr. Tyler’s demeanor
and did not find him credible.
Petitioners offered no business records, checks, or receipts
to prove that the sums claimed as deductions were actually spent
and no documentary evidence to substantiate that any claimed
expenditures were for a business purpose. In sum, petitioners
failed to substantiate the deductions in issue. We have no
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