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it has knowledge. See Clayton v. Commissioner, supra at 645;
DiLeo v. Commissioner, supra at 868.
Respondent’s bank deposit analysis encompassed an
examination of seven different joint bank accounts owned by the
Friscias. We review respondent’s determination as follows.
1. The 591 Account
The Friscias deposited $14,043 into a bank account numbered
108034591 (the 591 account) in 1994 and earned interest thereupon
of $132. The Friscias concede that these deposits are income.
Accordingly, $14,175 of the deposits and interest in the 591
account represents income taxable to the Friscias in 1994.
2. The 649 Account
The Friscias deposited $46,172 into a bank account numbered
206090649 (the 649 account) in 1994. The Friscias concede that
this figure represents gross receipts from Michelle Friscia’s
Amway distributorship. However, the Friscias contend that this
figure should be offset by various claimed deductions all of
which respondent has denied. Respondent asserts that the
Friscias’ testimony and canceled checks fail to substantiate that
any expenses were incurred in operating the Amway business. We
disagree.
The Amway distributorship system is well known to respondent
and this Court. See, e.g., Elliott v. Commissioner, 90 T.C. 960
(1988), affd. without published opinion 899 F.2d 18 (9th Cir.
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