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proceeds they claim Frank received for those vehicles. We agree
with respondent that petitioners have not established in the
record that the transactions occurred, or, if they did occur, the
amount of trade-in allowance or sales proceeds received.
Statements in briefs are not evidence, and they cannot be used as
such to supplement the record. See, e.g., Rule 143(b);
Niedringhaus v. Commissioner, 99 T.C. 202, 214 n.7 (1992). Thus,
we agree with respondent that no adjustment is required for
additional proceeds from automobile transactions, and we hold
accordingly.
4. Adjustments for Larry’s Audit Results
Petitioners contend that respondent failed to adjust Larry’s
source and application of funds analyses for 1989 and 1990 to
account for unreported income he agreed to include in his income
for those years pursuant to the settlement of docket No. 20854-
94. See infra Appendices (H), (I). Petitioners assert that an
adjustment to Larry’s source and application of funds analyses
for unreported income for 1989 and 1990 would result in a
corresponding reduction to the $38,018 and $43,404 “gifts to
Larry” respondent included as applications of funds by Frank and
Katherine for those years. Respondent asserts that an adjustment
to Larry’s source and application of funds analyses for 1989 and
1990 for unreported income cannot be made because the record does
not show to what extent, if any, the settlement related to any
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