-365-
serving. Respondent asserts Kanter offered no credible
documentation substantiating the nontaxable nature of the
$1,303,207 of deposits at issue. Respondent emphasizes that two
of the disputed deposits are attributable to funds Kanter
received from the TACI Special E and TACI Special Accounts which
Kanter purportedly used to disguise payments to himself as loans.
C. The STJ Report
The STJ report recommended holding for Kanter on this issue
on the grounds that (1) Kanter and Gallenberger testified
credibly that the questioned deposits were either loans to Kanter
or returns of Kanter’s capital,145 (2) Kanter’s and Gallenberger’s
testimony was corroborated by Kanter’s check register, and (3)
respondent offered no evidence to rebut the above evidence and
testimony.
D. Analysis
Considering the large amounts of the bank deposits in
question and Kanter’s obfuscation during the examination process,
we cannot fault respondent for declining to accept Kanter’s check
register as an adequate record of his taxable income for 1982.
Without more, respondent was wholly justified in employing the
145 The STJ report, at 131-132, includes statements
suggesting that Kanter offered testimony regarding his bank
deposits for 1982 and that testimony was credible. The Court is
unable to find any citation of Kanter’s testimony on this point
in petitioners’ posttrial briefs, nor is the testimony apparent
from a review of the transcript.
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