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income, but instead espoused inconsistent and implausible
explanations. The Court concludes that the $54,000 deposited by
petitioners into their Leadenhall bank account was unreported
income. Accordingly, the Court sustains respondent’s
determination on this issue.
B. Money and Finance Regulations
Regulations prescribe that transactions involving the
transfer of more than $10,000 in monetary instruments at one time
from the United States to a place outside of the United States,
or vice versa, must be reported to the Secretary of the Treasury
by the individual involved. See 31 U.S.C. sec. 5316 (2000); 31
C.F.R. sec. 103.23 and 103.27 (2000). “Monetary instruments”
includes all negotiable instruments, such as checks. 31 C.F.R.
103.11(u) (2000). Violation of the reporting requirements
applicable to the exportation or importation of monetary
instruments can result in criminal penalties consisting of fines,
imprisonment, or both. See 31 U.S.C. sec. 5322 (2000).
In response to questioning regarding the avoidance of such
reporting requirements, Mr. Wright could not explain why he would
issue six $9,000 checks (all drawn on the same Sun Trust bank
account) over a period of 3 consecutive days, all to be deposited
on the same day in the Bahamas, instead of one check for $54,000.
The Court concludes that Mr. Wright structured petitioners’
deposit transaction so as to avoid the exportation of monetary
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