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The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
Respondent determined against petitioners a deficiency of
$16,010 in Federal income tax and the accuracy-related penalty
under section 6662(a) for their 2000 tax year.
The issues for decision are: (1) Whether respondent
properly determined gross income under the bank deposits method
with respect to an activity conducted by Karen L. Kivett
(petitioner), and (2) whether petitioners are liable for the
accuracy-related penalty under section 6662(a) for negligence
and/or substantial understatement of tax.
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and are made part hereof.
Petitioners’ legal residence at the time the petition was filed
was Yakima, Washington.
Respondent’s determination arises solely from an activity
conducted by petitioner. There is no issue with regard to the
income or expenses of petitioner’s spouse, who was a Federal
employee.
The activity in question was referred to and described as a
“gifting club” operated by petitioner. This club was
1(...continued)
burden of proof to respondent. Under sec. 7491(c), as to
penalties, the burden of production is on respondent. The facts
of this case, as recited, show that respondent has met that
burden.
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