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of 1990. Mr. Strong testified that he made these representations
on the advice of his bankruptcy counsel. Mr. Strong’s bankruptcy
counsel, Mr. Munns, plainly denied that charge in his testimony.
Mr. Munns unequivocally stated that he did not inform Mr. Strong
that cash on hand or the value of a corporation did not have to
be reported in bankruptcy. Mr. Munns also stated that Mr. Strong
failed to inform him that he had a significant amount of cash on
hand.
In conclusion, we reject Mr. Strong’s cash hoard explanation
for the unidentified deposits. Respondent also asserts judicial
estoppel as a result of the representations in the bankruptcy
filing. Because we reject Mr. Strong’s claims of a cash hoard,
it is unnecessary for us to reach this argument.
The burden is on SCC to establish that the deposits in
dispute were not income. “Once the deposits were shown to be in
the nature of income and to exceed what the taxpayers had
reported as income, it became the taxpayers’ responsibility to
persuade the trier of fact the deposits were nontaxable.” Dodge
v. Commissioner, 981 F.2d at 354. In addition to Mr. Strong’s
claim of a cash hoard, SCC argues that two of the deposits were
not taxable to SCC. The first is a deposit of $8,500 on August
10, 1994, which Mr. Strong claims was payment for the sale of a
motorcycle. In that instance, we accept the corroborating
testimony of Mr. Strong’s then girlfriend and hold that the
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