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taxpayer. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);
Interstate Transit Lines v. Commissioner, 319 U.S. 590, 593
(1943); Deputy v. duPont, 308 U.S. 488, 493 (1940); New Colonial
Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
In the notice of deficiency, respondent determined that
petitioner had additional income of $54,802 from WDI for 1995, as
a result of the disallowance of deductions on the corporation’s
1995 return in that amount. Petitioner has not shown that WDI is
entitled to any of the deductions that were disallowed. We
accordingly sustain respondent’s determination that WDI’s
deductions totaling $54,802 for 1995 should be disallowed.
At trial, respondent also proffered detailed evidence
demonstrating that petitioner caused WDI to pay $18,660 in
expenditures for yachts, and that these expenditures were
deducted on WDI’s 1995 return. While petitioner argues on brief
that the yacht-related expenditures deducted by WDI were proper
because they were reflected in petitioner’s drawing account, we
need not resolve this issue, as respondent has sought no increase
in the 1995 deficiency as a result of this evidence.17
17 We surmise that respondent proffered this evidence in
support of his determination of fraud.
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