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in the answer. The change was based on respondent’s decision to
rely on an amount from the lower end of a range of values
purportedly supported by the testimony given at petitioner’s
criminal trial.
Petitioner filed a response to respondent’s proposed
findings and memorandum. In this document, petitioner again
attacked his criminal conviction and the testimony given at the
criminal trial and largely repeated or augmented many of the
contentions made in previous filings. Additionally, in response
to allegations by respondent that petitioner deposited cash into
his personal bank account of $21,000 in 1990 and $24,000 in 1991,
petitioner admitted cash deposits were made but claimed, without
any documentary support, that the funds represented loans from
Hatcher.
Discussion
I. Unreported Income
The Internal Revenue Code imposes a Federal tax on the
taxable income of every individual. Sec. 1. Section 61(a)
defines gross income for purposes of calculating taxable income
as “all income from whatever source derived”. This broad
definition includes income obtained from illegal sources. James
v. United States, 366 U.S. 213, 218 (1961); sec. 1.61-14(a),
Income Tax Regs. Respondent has determined that petitioner
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