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As to that argument, respondent asserts that it was
incumbent upon petitioners to substantiate the fact and amount of
the loan. It is reasonable, according to respondent, not to
concede an adjustment until he has received and verified adequate
substantiation for the item in question. He therefore concludes
that as to the unreported income adjustment, his position was
reasonable when taken and appropriately conceded when
substantiation was provided to Appeals.
Petitioners argue that they provided to Appeals a copy of a
"loan document" that verifies a $10,000 loan received by them
from petitioner's father. Mere presentation of a note or "loan
document" may not be sufficient evidence of the existence of such
a loan. See Sullivan v. Commissioner, T.C. Memo. 1985-217.
Further documentation and testimony might be required. See Kim
v. Commissioner, T.C. Memo. 2000-83; Coutsoubelis v.
Commissioner, T.C. Memo. 1993-457; Facuseh v. Commissioner, T.C.
Memo. 1988-10; Mahigel v. Commissioner, T.C. Memo. 1983-529;
Adams v. Commissioner, T.C. Memo. 1980-398.
It is reasonable for respondent to make an adjustment for an
item and refuse to concede the adjustment until he has received
and verified petitioners' substantiation for the amount adjusted.
See Beecroft v. Commissioner, T.C. Memo. 1997-23; Simpson
Financial Servs., Inc. v. Commissioner, T.C. Memo. 1996-317;
McDaniel v. Commissioner, T.C. Memo. 1993-148.
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