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$6,956.97 in auto insurance proceeds from State Farm Insurance7
and $9,000 in loan repayment proceeds from his sister.8
Petitioner has not convinced us that he reported nontaxable
items in gross receipts. Petitioner testified that he kept a
cash receipts journal and bank statements to determine his gross
receipts. Petitioner did not provide a copy of his cash receipts
journal or any bank statements to show that nontaxable items were
in fact included in his gross receipts. Furthermore, petitioner
is a tax lawyer9 who testified that he knows that some items,
particularly repayment of loans, are not includable in gross
income. In light of petitioner's knowledge of the tax laws and
his experience in preparing tax returns, we do not find his
explanation credible. Therefore, on the basis of this record, we
7Petitioner produced a check, drawn on his account, payable
to "Lumpkins" in the amount of $6,956.97. The check contained a
notation indicating that it was for "car repair/State Farm".
Petitioner testified that he received $6,956.97 from State Farm
Insurance and then paid Lumpkins, an auto repair shop, the exact
same amount. However, petitioner did not provide a copy of the
draft from State Farm Insurance.
8Petitioner provided a check payable to "Larry Miller
Attorney-at-Law" for $9,000, with the notation, that in part
indicated, that it was for "repayment of loan". The check was
drawn on the High Fashions' account in Memphis, Tennessee.
Petitioner testified that his sister issued the check.
9Petitioner testified that he has been practicing law since
1985, and, as part of his practice, he prepares tax returns
including Forms 1040 with Schedules C.
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