Bennett Geiger - Page 14

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          In Mann, a secretary embezzled money from the taxpayer by forging           
          checks.  The embezzlement portion of the opinion does not deal              
          with the amount of embezzlement by the secretary at all, only the           
          proper year of deductibility.  The taxpayer in Mann also was the            
          victim of theft by a business partner.  The taxpayer had given a            
          business partner $10,200 to open a store.  The partner did open a           
          store, but shortly thereafter closed it and absconded with the              
          remaining capital.  Using the Cohan rule, the Court estimated               
          that $5,000 of the $10,200 had been embezzled and allowed                   
          ordinary loss treatment for that amount.  The Court ruled that              
          the rest of the loss was a capital loss resulting from the                  
          failure of the store.  The Court clearly stated:  “Neither the              
          fact that petitioner sustained a loss nor the amount of such loss           
          is in dispute.”  Id.  In the light of the lack of credible                  
          evidence to support the conclusion that there was an embezzlement           
          in any amount, we decline to apply Mann and Cohan in the instant            
               We find unconvincing petitioner’s contention that any time             
          more than one check was written to petitioner during any                    
          particular day, there must have been embezzlement.  Given                   
          petitioner’s extensive use of cash for business expenses and                
          commingling of personal funds and expenses with those of BBTS,              
          petitioner’s bare assertions regarding the number of checks in a            
          day is insufficient to prove theft.                                         

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