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cash used to make payments in any of the subject years.3
Accordingly, petitioners have failed to show error in
respondent’s reconstruction of their taxable income.
As best we can discern, petitioners’ primary defense seems
to be that they believed that their guilty pleas to tax evasion
with respect to taxable year 1990 would relieve them of civil
tax liability for all the subject years. Petitioners’
misapprehensions in this regard afford no basis for relief. In
any event, the judgments in Lesely’s and Aljournia’s respective
criminal cases explicitly state that full restitution was not
ordered in the criminal proceedings because restitution “will be
handled under civil means”.
Accordingly, we sustain respondent’s determinations as to
petitioners’ unreported taxable income.
2. Self-Employment Tax
Section 1401 provides that a tax shall be imposed on the
self-employment income of every individual. Petitioners have
the burden of proving that they are not liable for self-
employment taxes. See Rule 142(a). Petitioners failed to offer
3 Aljournia Moore testified that during the search of
petitioners’ residence in 1994, North Carolina law enforcement
officers seized, among other things, a “bag of buffalo nickels”
given to her by her grandmother. It does not appear, however,
that this currency, or other amounts of currency seized from
petitioners’ residence or from Moore’s Auto in 1994, were
included in respondent’s bank deposits plus cash expenditures
analysis for the years at issue.
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Last modified: May 25, 2011