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many transactions reflected on the bank statements. According to
respondent, petitioners had an obligation to cooperate with Agent
Red during the course of the examinations, and their failure to
do so resulted in the adjustments made in the notices of
deficiency.
We agree with respondent. Initially we note that
petitioners' statements in the petitions alleging that Agent Red
never asked for an explanation with respect to the deposits in
question are patently frivolous. The IDR's served upon
petitioners and their representatives asked for such an
explanation in clear terms in the early stages of the
examinations. Likewise, during the summons conferences, which
were attended by at least one counsel of record in these cases,
petitioners were specifically questioned about the circumstances
surrounding any loans among them.3 To the extent that any
explanations were given, for example, as to the amount of
interest charged on loans, the explanations were inconsistent.
Furthermore, in the Abrahams' case, reference in the amendment to
petition to Agent Red's failure to take into account "non-taxable
3We cannot help but question the bona fides of petitioners'
allegations on this point due to the fact that counsel was
present at the summons conferences and aware of the issuance and
contents of the various IDR's. See Rule 33.
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