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cash or paid her various expenses.4 Petitioners did not maintain
any receipts or other documentary evidence with respect to the
amounts paid to, or on behalf of, their daughter.
I. Federal Income Tax Returns
A. Petitioners’ Individual Tax Returns
Some time prior to the end of 1993, petitioners sent to the
Internal Revenue Service (IRS) a joint Form 1040, U.S. Individual
Income Tax Return, for 1992. That document had “Estimated”
written on the top of the first page (1992 “Estimated” return).
Petitioners testified that they prepared and sent the 1992
“Estimated” return in that manner because they were not in
possession of all their supporting documents and therefore were
not able to determine the exact amounts to be reported on the
return.
On or about August 12, 1994, petitioners sent to the IRS an
unsigned Form 1040 for the 1993 taxable year. Petitioners had
written “Estimated” on the top of the first page of the unsigned
1993 return (1993 “Estimated” return). The 1993 “Estimated”
return did not have any attached schedules or forms.
Petitioners claimed that they were unable to file a final
tax return for either 1992 or 1993 prior to the end of 1994 due
to time restraints from their various work responsibilities,
4 For example, on their 1994 return, petitioners deducted
$17,874 for payments made to, or on behalf of, their daughter.
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