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Petitioner’s testimony was that he thought it “probable”
that the rounded dollar amounts were not income during the years
in which they were received and transferred from the trust
account to another account. In petitioners’ brief, they argue:
b. Large Rounded Off Numbers. Mr. Kaufman has
always contended that bills for work and expenses
already done typically total up to odd dollars and
cents; and that large rounded off amounts (such as
$40,000) are much more likely to be retainers for
future work than they are to be bills for work and
expenses already done. Paragraph 6 of the petitioners’
pre-trial memorandum. And common sense tells you
that’s true; and that the petitioners’ position is
inherently probable. And the reason why you would get
three checks from the company to make up the $40,000
amount is that different investors and reinsurers are
responsible for different levels of risk at many of
these companies, so that different (typically
reinsurer) authorizations are required to get money in
excess of a certain level (say, $20,000).
Petitioners further show their tendency to rely on
speculative afterthought in the following passage from their
brief:
51. The $50,000 Heggen Mistake. The night before
trial, Mr. Kaufman discovered he was been [sic]
mistaken about a $50,000 Heggen item in 1992. * * *
So he admitted that to the Court. But it now occurs to
the petitioners, after further thought, that this
mistake did not require the $50,000 to be INCOME.
Getting it and putting it into the TRUST account would
mean it still was NOT INCOME, though received.
Respondent had a burden to show that it was EARNED that
year as well as received into the trust account.
Petitioner’s uncorroborated testimony is patently unreliable. We
are not persuaded by petitioner’s belated rationalizations and
attempts to exclude from taxable income amounts that he received
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Last modified: May 25, 2011