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Although the examination of petitioner’s 1998 individual
return commenced after July 22, 1998, respondent contends
petitioner does not meet the requirements of section 7491(a).
Petitioner does not contend otherwise. The Court concludes that
section 7491(a) is inapplicable. However, the resolution of the
issues in this case does not depend on which party has the burden
of proof. We resolve these issues on the preponderance of the
evidence in the record.
1. Nonemployee Compensation and Self-Employment Tax
Petitioner cashed checks for Mr. Fullen and transferred the
proceeds to him. She identified her signature on only three of
the checks in issue. Petitioner contends the signatures on the
remaining 19 checks are not hers. At trial, Mr. Fullen admitted
he had signed petitioner’s name to many of the checks himself.
The Court has examined the signatures on all of the checks
in issue. Having compared those signatures to the signatures on
the various documents petitioner has filed with the Court, the
Court finds that only three of the signatures are petitioner’s.
“It is well settled that the mere receipt and possession of
money does not by itself constitute taxable income.” Liddy v.
Commissioner, T.C. Memo. 1985-107, affd. 808 F.2d 312 (4th Cir.
1986).
This Court stated in Diamond v. Commissioner, 56 T.C. 530,
541 (1971), affd. 492 F.2d 286 (7th Cir. 1974): “We accept as
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