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ordinary and necessary expenses of running petitioners’ business.
See sec. 162. HRDC maintained a checking account to which
petitioners could have deposited the money from the extras for no
charge. Petitioners testified that they cashed checks at the
Money Exchange because they knew the owner and it was within
blocks of the office (although Mr. Payne, who did not drive,
needed someone to drive him there each time he went). It is
obvious that petitioners used the Money Exchange to avoid the
inclusion of the income in their bank records. These reasons are
not related, let alone ordinary and necessary, to HRDC’s
business. Therefore, petitioners are not entitled to deduct the
cost of check-cashing fees.
V. Unreported Additional Bank Deposits
Respondent adjusted petitioners’ income by $3,681 for 1993
and $30,953.94 for 1995 for bank deposits made to their account
in excess of all identified sources, including extras and income
from HRDC. Bank deposits are prima facie evidence of income.
Tokarski v. Commissioner, 87 T.C. 74, 77 (1986). Petitioners
stipulated that the deposits were made to their account, but they
reserved the right to show that two of the deposits were from
nontaxable sources. On brief, petitioners conceded that the
$3,681 is includable in their 1993 income. At trial, Mrs. Payne
testified that a deposit of $850 in 1995 was from Mr. Payne’s
sale of a gun to a sporting goods store. Mrs. Payne also
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