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unreported gross receipts of $6,670. At trial, petitioners
argued that the analysis was faulty because it failed to take
into account an insurance settlement of $6,635.90 received in
2003. During her testimony, Mrs. Runels introduced into evidence
a document from Interinsurance Exchange of the Automobile Club
referencing a February 2, 2003, payment to petitioners of
$6,635.90 for a claim for damage to their dwelling. Mrs. Runels
explained that the payment was for a claim for “our dog flooding
our house.” Petitioners argue that the check “pretty much covers
that extra $7,000 they say I made.” Petitioners are correct; the
insurance payment was not included on the “income” side of
respondent’s cash T analysis because they did not inform the TCO
about the transaction during the examination.
The Court infers, without evidence to the contrary, that
petitioners expended in 2003 the insurance settlement of
$6,635.90 to repair the flood damage to their home. Since the
expenditures for the flood damage repairs were not included on
the expense side of the analysis, the exclusion of the insurance
settlement payment from the “income” side of the item failed to
affect the analysis because it would be balanced by the
additional expenses for repairs.
Petitioners also argued that they had a $38,000 line of
credit available as well as $5,000 in a savings account as of
January 2003. But petitioners offered no evidence during the
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