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Petitioners’ oft-voiced contention that the excess bank
deposits are from “traditional inter-family [intra-family?] and
friend transfers”, was not supported by evidence of record.
Where there was evidence presented to respondent during the
audit, respondent treated the transactions as nontaxable, as is
shown in Exhibits 26-R and 39-R. Before the Court, petitioners
neither provided particulars, nor presented the testimony of
relatives or friends, nor explained why those witnesses were not
available. See Wichita Terminal Elevator Co. v. Commissioner, 6
T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947).
Petitioners have failed to carry their burden of proving
that they are entitled to nontaxable treatment for any deposits
(or parts of any deposits) in excess of what respondent already
allowed.
Finally, petitioners contend as follows:
In fact, the Taxpayers should not be subject to any
civil tax penalties on the tip income received from the
casino as they have reasonable cause for their actions.
However, should the Tax Court determine that a civil tax
penalty should be assessed against the Taxpayers based on
their receipt of tip income, a fair reading of recent case
law clearly establishes that the Petitioners should (at the
most) only be subject to the negligence penalty under Code
Section 6662.
Neither petitioner testified why he or she thought that the
income (whether hourly compensation or tip income) was not
subject to tax. For that matter, neither petitioner even
testified that he or she thought any category or specific item of
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