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We decide whether a witness is credible on the basis of
objective facts, the reasonableness of the testimony, and the
demeanor of the witness. Quock Ting v. United States, 140 U.S.
417, 420-421 (1891); Wood v. Commissioner, 338 F.2d 602, 605 (9th
Cir. 1964), affg. 41 T.C. 593 (1964); Pinder v. United States,
330 F.2d 119, 124-125 (5th Cir. 1964); Concord Consumers Hous.
Coop. v. Commissioner, 89 T.C. 105, 124 n. 21 (1987).
On cross-examination, when presented with documents offered
to impeach her testimony, petitioner admitted that she had signed
(1) a promissory note in which she promised to pay Napa
$421,843.22; (2) a consent to action in which she, as sole
director, approved loans from Napa to her totaling $702,503.90 in
exchange for her promissory note; and (3) at least 54 Napa
checks, including 12 payable to her.
Petitioner is a college graduate. We believe that
petitioner knew that she could not sign a corporate check without
authority from Napa. Petitioner denied knowing anything about
Napa’s liquidation and testified that she did not sign the Napa
liquidation document. However, her signature on that document
was notarized. Although the notarization was made by Lalosh, an
employee who worked in James Merriam’s office, Lalosh testified
in this case on matters other than the notarization, and we have
no reason to doubt her integrity or the validity of the
notarization.
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