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Petitioner argues that reasonable inferences support the
conclusion that there was an embezzlement case and that such
inferences are sufficient to support a decision in his favor.
Petitioner cites Moore v. Commissioner, T.C. Memo. 1983-671, for
the proposition that a court may rely on reasonable inferences in
an embezzlement case. In fact, the actual holding in that case
is that the Court will not make or rely upon assumptions without
some basis in the evidence. The taxpayer in Moore, like
petitioner, failed to produce sufficient evidence to raise his
claim of embezzlement from a bare assumption to a reasonable
inference. Moore also fails to support petitioner’s position in
that the existence and amount of money missing in Moore were not
in issue, only the characterization of the money as stolen from
the taxpayer versus misappropriated from a partnership. On the
basis of the record, we conclude that petitioner has not provided
sufficient credible evidence to support a reasonable inference of
embezzlement.
Petitioner further argues that, after inferring that some
money was embezzled, the Court can now estimate the amount of
loss. Petitioner cites Mann v. Commissioner, T.C. Memo 1981-684,
for the proposition that the Court may estimate an embezzlement
loss, applying the rule of Cohan v. Commissioner, 39 F.2d 540
(2d Cir. 1930). Although Mann did involve both an embezzlement
and an estimation, there was no estimation of an embezzlement.
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