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remaining balance of $610,000 and deposited it in his personal
bank account in Columbus, Ohio.
Petitioner also omitted interest income earned on his own
accounts at the First National City Bank in London. In 1974 and
1975 he earned interest of $38,055 and $43,641, respectively. In
1976 he earned interest of $44,127.50. Although petitioner
testified that the account in his name at the FNCB London was an
account of Diesel Power, the documentary evidence shows
otherwise. First, Diesel Power had a separate bank account, FNCB
London. No plausible reason was shown for it to have an account
in petitioner's name at that bank. Second, petitioner had
complete access to and control of the accounts in his own name.
He directed payments to the accounts and invested sums on deposit
in the accounts. He was the signatory on the accounts and the
accounts had no restrictions.
3. Overstatements of Business Expenses and Itemized
Deductions
It is well settled that a fraudulent understatement of
income can be accomplished by overstatements of business expenses
and deductions. See Drobny v. Commissioner, 86 T.C. 1326, 1349
(1986), and cases cited therein; Pettit v. Commissioner, T.C.
Memo. 1984-460, affd. without published opinion 792 F.2d 1122
(9th Cir. 1986); Gano v. Commissioner, 19 B.T.A. 518, 533 (1930).
Here petitioner consistently followed a pattern of claiming
excessive business expenses and deductions for all the years in
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