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dated February 20, 1996, for $450, on which the memo line states
“Attorneys fees”; (2) a check from Nhu-Hanh Duong dated June 13,
1996, for $446.54, on which the memo line states “Deposition for
Kevin Holt and pictures;” and (3) a check from Edward R. Gallegos
dated October 1, 1996, for $1,000, on which the memo line states
“partial retainer tax audit”.
In 1997, an additional $8,277 was deposited into the WPA
bank account.30 The additional deposits included those items as:
(1) Check No. 2011 from Preferred Capital for $50 dated February
7, 1997, on which the memo line states “Attorney advice”; and (2)
check No. 902 from Advanced Strategies for $2,400 dated May 27,
1997, on which the memo line states “Trust Preparation”. Mr.
Sowards provided no evidence whatsoever regarding these
additional deposits.
The record clearly establishes that Mr. Sowards regularly
rendered services to STL, billing it via weekly statements, for
which he regularly received remuneration. The amounts STL paid
to WPA, which were deposited into WPA’s account, constitute
taxable income to petitioners. Thus, we hold that additional
income shall be imputed to petitioners for 1995, 1996, and 1997,
in the respective amounts $58,057, $128,000, and $50,345.
Additionally, we are convinced that the amounts deposited in
30In fact, in 1997 $74,121.55 was deposited into the WPA
account of which $15,500 is nontaxable items.
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