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With respect to the cash gross receipts from the flooring
business purportedly conducted by Floors Trust, respondent
computed cash gross receipts for 1998 as equal to the sum of all
deposits ($93,831) into the checking account maintained by Harlan
and Jody in the name of Floors Trust. Petitioners have
stipulated that the gross receipts from Floors Trust’s business
were deposited into that account, and Harlan further testified
that the deposits represented income from the business activities
of Floors Trust. While petitioners claim, for the first time on
brief, that they had business records substantiating gross
receipts (such that respondent need not have resorted to a bank
deposits analysis), no such records were offered as evidence at
trial. Petitioners also claim, for the first time on brief, that
$3,000 of the deposits represented loans from Jody to the
business. No evidence was offered at trial to support this
claim, even though Jody was present and sworn as a witness (in
addition to Harlan). Unsupported statements in a brief and
exhibits that have not been admitted into evidence do not
constitute competent evidence. Rule 143(b); Niedringhaus v.
Commissioner, 99 T.C. 202 (1999); Viehweg v. Commissioner, 90
T.C. 1248 (1988); Castro v. Commissioner, T.C. Memo 2001-115.
Petitioners do not further contest respondent’s reconstruction.11
11 On brief, petitioners allege that the total deposits for
1998 were $87,845.97, as compared to respondent’s figure of
(continued...)
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