- 10 - including inconsistencies in their testimony, we do not find Mr. Yang or Fang Long Yang to be credible with respect to this issue. Petitioners’ explanation for the bank deposits is that all of the money deposited was the proceeds of gifts. Petitioners testified that neither of them was gainfully employed or engaged in business after Mr. Yang discontinued his employment at Hughes Aircraft. However, in their loan applications, signed under penalty of perjury, petitioners told a different story. They reported earning substantial amounts of business income, and Mr. Yang was classified as self-employed. The Bank of Taiwan account was referred to as a “business account”,7 Mr. Yang admitted spending an increasing amount of time overseas for work, and he stated that he had manufacturing clients in Taiwan. Petitioners claim that they misrepresented their financial information on the loan applications in order to get the loans approved and inadvertently failed to disclose the Bank of Taiwan account on their income tax returns. Based on the contradictory evidence, we do not find petitioners’ explanations to be persuasive. Accordingly, with the exceptions noted below, we hold that the amounts deposited into petitioners’ bank accounts in 1995 and 1996 are taxable income. 7Petitioners failed to report their interest in the Bank of Taiwan account on their 1995 and 1996 tax returns.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
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