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On audit, respondent prepared and filed Federal income tax
returns for petitioner for 1991, 1993, and 1994.
Among other adjustments, for 1991 respondent charged
petitioner with the $22,192 in interest income on the Bank Leumi
CD. For 1994, respondent charged petitioner with the $162,000 in
gambling winnings from Caesar’s Palace and the $101,500 in
lottery winnings. Due to lack of substantiation, respondent
allowed petitioner no gambling costs. Respondent also did not
allow petitioner an exemption for his wife for any of the years
in dispute.
In early 1995, in conjunction with a criminal investigation
of petitioner, the attorney general of New York was granted a
subpoena and seized many of petitioner’s business records. The
indictment against petitioner was later dismissed. In 1998, the
attorney general of New York returned to petitioner some of his
business records.
OPINION
For the years in issue, respondent’s adjustments ordinarily
carry with them a presumption of correctness. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111 (1933). However, with regard to
the $22,192 in interest income relating to the certificate of
deposit, petitioner contends that under section 6201(d) the
burden should be on respondent to prove that the interest income
should be charged to petitioner.
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