Frank H. and Marla C. Black - Page 29

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          SCSOS.  Agent Helton learned from the SCSOS that a corporation              
          named New Faith Baptist, Inc., was on file, and that its articles           
          of incorporation listed petitioners’ Rock Hill, South Carolina,             
          address as its corporate address and listed Mr. Black as a                  
          corporate officer.                                                          
               At trial, Mrs. Black testified that she first became aware             
          of NFBC “when someone called me on the phone and asked to speak             
          to somebody from the church”.  Mrs. Black also testified that               
          after the call she asked Mr. Black about NFBC and “he said [it]             
          used to be in the house; it used to be a church that he and his             
          friends had formed, and it was not valid”.  After Mr. Black’s               
          objection, Mrs. Black altered her testimony saying: “what I was             
          saying is it was not there in the home anymore.”  Petitioners               
          never provided Agent Helton with any canceled checks or any other           
          credible evidence to show that they had made any contributions to           
          NFBC (or any church) during 1987, 1988, or 1989.                            
               Petitioners claimed a number of inappropriate deductions for           
          personal expenditures for the years in issue, including, but not            
          limited to, a new range, re-covering a sofa, an aquarium, and the           
          work performed by Daniel Howachyn.  Petitioners argue that such             
          deductions were for their home office or Mrs. Black’s home-based            
          business.  However, at trial, they testified repeatedly that the            
          office was, in fact, their den and was not used exclusively for             
          business purposes.                                                          

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