Stephen & Dawn Del Monico - Page 7

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          The Commissioner has produced numerous paychecks issued to                  
          petitioner by New Dimensions during the disputed pay period and             
          copies of petitioner’s bank statements in support of the Form               
          1099, but he acknowledges that several paychecks are missing.               
          As set forth below, the Court finds that the bank statements are            
          inconclusive, and the probative evidence supports only a finding            
          that petitioner earned $9,847.36 of the $12,396 reported on the             
          Form 1099.  Accordingly, we conclude that the Commissioner has              
          produced sufficient evidence to show that petitioner had                    
          unreported income in 1999 and has satisfied his burden of                   
          production to the extent of the paychecks produced in support of            
          the Form 1099, but he has not completely substantiated the full             
          amount reported on the Form 1099.                                           
          Unreported Income                                                           
               Section 61 provides that income from whatever source                   
          derived, including compensation for services, must be included              
          in gross income.                                                            
               From the record in this case it is plain that petitioners              
          must have realized that they were severely understating their               
          income on their Federal income tax return for 1999.  Even if we             
          were to assume that petitioner did not receive a Form 1099 from             
          New Dimensions, a cursory review of his Form W-2 from New                   
          Dimensions should have alerted petitioner to the fact that                  
          $28,320 only represented approximately two-thirds of his total              






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