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not arbitrary or capricious in resorting to the bank deposits
method. DiLeo v. Commissioner, 96 T.C. 858, 867 (1991), affd.
959 F.2d 16 (2d Cir. 1992). The fact that the Commissioner was
not completely correct does not invalidate the method employed.
Id. at 868.
In the absence of books and records in this case, respondent
analyzed petitioner's bank records and prepared schedules that
summarized all of the transactions occurring in the accounts
during 1988 and 1990. Respondent identified any deposits which
represented nontaxable income or interaccount transfers, or which
were receipts of income reported on petitioner's tax return.
Consequently, with the exception hereinafter noted, respondent
has properly reconstructed petitioner's gross income under the
bank deposits method. Respondent made substantial concessions in
connection with her bank deposit analysis, both before and during
the trial. We have examined petitioner's remaining objections
and find that all but one have either been taken into account in
respondent's analysis or are unsupported by the record.
Petitioner claims that respondent failed to reduce the
additional income computation for 1990 by $1,500, the amount of
an interbank transfer from petitioner's account at the Bank of
Guam to his account at Wells Fargo Bank. The record shows two
$1,500 checks drawn on the Bank of Guam, and two deposits, each
in the amount of $1,500, into petitioner's Wells Fargo Bank
account, all within the April 1, 1990, to April 6, 1990, time
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