- 13 - by a preponderance of the evidence that an omitted amount exceeding 25 percent of the gross income reported was properly includable in gross income. Sec. 6501(e)(1)(A); Burbage v. Commissioner, 82 T.C. 546, 553 (1984), affd. 774 F.2d 644 (4th Cir. 1985); Philipp Bros. Chems., Inc. v. Commissioner, 52 T.C. 240, 254-255 (1969), affd. 435 F.2d 53 (2d Cir. 1970). Petitioner reported gross income in the amount of $162,553 in his 1985 return; 25 percent of this amount is $40,638.25. As stated above at paragraph A-4, petitioner is collaterally estopped from denying that he received some amount of unreported income in 1985. Petitioner nominally borrowed funds for commercial purposes, yet he deposited $1,372,360 of the proceeds into his personal accounts. He did not need that portion of the proceeds to buy the property for which the loans nominally were made. He exaggerated the value of the collateral provided for the loans. These violations of the usual obligations of a borrower are sufficient to show by a preponderance of the evidence that he did not intend to fully repay the loans. Given the massive amount of the deposits ($1,372,360), we infer that petitioner received income of more than $40,638.25 from his deposits of loan proceeds into his personal accounts in 1985. Petitioner introduced no evidence to the contrary. Thus, we conclude that petitioner omitted more than 25 percent of his gross income, and respondentPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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