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The witnesses could not remember the exact amounts they
provided petitioner or exactly when the alleged loans were made
or repaid. One witness changed three times his story about how
often he provided petitioner money. One witness testified that
he provided petitioner approximately $40,000 per month during the
years in issue. This amount alone (approximately $480,000 per
year) would almost equal or exceed the total gross receipts
reported during the years in issue.
Petitioner testified that Mr. Rothchild, petitioners’ return
preparer for 1995, 1996, 1997, and 1998, included in gross
receipts the alleged loans petitioner deposited into the
minimart’s bank accounts. No evidence corroborated that
petitioner deposited any of the alleged loans into the minimart’s
bank accounts. Meredith J. Polk, a C.P.A. later hired by
petitioner for the audit and this case, testified that he did not
know how Mr. Rothchild arrived at the gross receipts figures on
the 1995, 1996, 1997, and 1998 returns.
The testimony of petitioner and other witnesses regarding
the alleged loans was general, vague, conclusory, questionable,
and contradictory in certain material respects. Under the
circumstances presented here, we are not required to, and
generally do not, rely on petitioner’s testimony regarding the
alleged loans to decide whether petitioners’ gross receipts are
less than the amounts reported on their tax returns. See Lerch
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