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Moreover, Ms. Clark’s testimony lacks credibility. For
years, Ms. Clark maintained that she did not embezzle from BBTS,
including in an affidavit and on her application for a real
estate license. Furthermore, during February 2006, petitioner
threatened Ms. Clark with libel, after which she first admitted
to the embezzlement. Additionally, Ms. Clark’s admission to the
embezzlement during the testimony at trial was made after
receiving legal advice from petitioner’s counsel that she could
no longer be prosecuted criminally or be liable for additional
taxes from the alleged embezzlement. Also at trial, Ms. Clark
could not explain why she continued to carry a credit card
balance while allegedly embezzling from BBTS. Likewise, she did
not provide convincing testimony regarding the amount of the
embezzlement or what she did with the money. Finally, it is
implausible to us that Ms. Ellis would recruit Ms. Clark to
embezzle from BBTS, knowing Ms. Clark was formerly married to
petitioner and was in a relationship with him at the time. On
the basis of the record, we hold that petitioner has failed to
prove that he is entitled to any embezzlement deduction beyond
the amount respondent allowed in the notice of deficiency.
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