- 4 -
Utilities 2,034 -0- 2,034
Robes, etc. 3,000 500 2,500
Dry Cleaning 1,900 500 1,400
Tithes 2,860 -0- 12,860
1 In the notice of deficiency respondent allowed petitioners
an additional $5,547 as charitable contributions on Schedule A,
Itemized Deductions, which includes the amount petitioners
claimed on Schedule C as tithes.
Discussion
A. Unreported Income
Initially, we note that it appears that the bank deposits
analysis should be modified to reflect the dividend income ($629)
that petitioners concede was not reported on their return. We
also accept petitioner’s testimony that the analysis should be
modified to reflect the money borrowed ($1,000) from Robin
Oliver.
With respect to the balance of the unexplained bank
deposits, petitioners argue that these funds are nontaxable gifts
from various unspecified members of the church. Section 102(a)
provides that “Gross income does not include the value of
property acquired by gift”. Neither the Code nor the regulations
define a gift for the purposes of section 102. In Commissioner
v. Duberstein, 363 U.S. 278, 285-286 (1960), the Supreme Court
summarized the case law regarding whether amounts received were
gifts within the meaning of section 102 as follows:
The mere absence of a legal or moral obligation to make such
a payment does not establish that it is a gift. And,
importantly, if the payment proceeds primarily from “the
constraining force of any moral or legal duty”, or from “the
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