Friend of mine received a wire bank transfer of $69k in 2008, the same year he was audited. What does he do?

During the 2008 year, my friend received a wire transfer of $69k and in the same year he was audited. Now my friend claims that the $69k that he got was from a close personal friend of the family and that person gave him the $69k because he knew that my friend was starting his own business and that he had two mortgages since he had two houses. Anyways at the time of the wire transfer the person that gave my friend the money didn't write any contract or anything at all between himself and my friend. In fact this guy told my friend that the only time he would need to repay him back was when he was really able to stand on his feet. So as you see he was in no hurry to collect the money he wired to my friend. With that said my friend was audited for the 2008 tax year and now must provide bank statements for the whole year and credit card statements for the auditor to see. My friend is self employed and has his own business but he was in the negative in 2008. In fact my friend was -50k and now must prove to auditor how was he able to pay for everything since he was severely in the minus. Anyways the auditor is gonna see when he reviews the bank statements that there was a wire transfer of $69k. What my friend would like to know is what should he tell the auditor about this money since there was no contracts or terms of the loans set between himself and the person who wired him the money. In fact my friend has been unsuccessful the past month in reaching this guy who leant him the money. What should my friend tell the auditor in this case because we all know that loans, gifts, and inheritances that a person receives are not taxable and my friend wants to be in the clear with the IRS. Please help.