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shows that WFIC paid $18,660 toward the cost of the Buick.9
Petitioner must include this amount as compensation in 1993.
5. Cash Receipts of $3,000 From Taxman
Respondent argues that petitioner must report $3,000 of
compensation for each of 1990, 1991, 1992, and 1993, representing
Taxman’s cash receipts petitioner used for his own personal
expenses. Because the issue was raised in an amended answer,
respondent has the burden of proving the $3,000 was income to
petitioner in each year.
We found above that respondent has proven by clear and
convincing evidence that petitioner fraudulently used at least a
portion of the $3,000 for his own personal expenses. Petitioner
argued at trial that he used some of the cash to pay for business
expenses of Taxman. Respondent has shown that petitioner did not
keep any records of these business expenses and that the income
and offsetting expenses were not reported on Taxman’s corporate
returns. Ms. Jilek credibly testified that she could not recall
an instance, other than occasional purchases of postage, in which
she or petitioner paid an expense of Taxman in cash. Even small
expenses were paid by check. In addition, Ms. Jilek testified
that she did not know how petitioner spent the cash. This is
9The purchase price of the Buick was $27,800, plus tax of
$885 and “license and fees” of $75, totaling $28,760. This
amount was reduced by the value of the Ford Probe trade-in,
$10,100, for a net amount payable by WFIC of $18,660.
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