- 10 -
during 1993 and 1994. In that regard, it is clear that
petitioner worked for Party and was reimbursed for expenditures
he made. Petitioner refused to show the amount of the
reimbursements and/or that the reimbursements were not income to
him and/or that any reimbursed expenditures would have been
deductible. These circumstances permit respondent to reconstruct
petitioner's income. At trial, however, petitioner did present
credible testimony showing that his costs of living were quite
modest. In particular, petitioner lived with his mother and had
no cost for shelter and reduced costs for his food. In addition,
petitioner's automobiles were nominal in value (several hundred
dollars). Finally, petitioner had lost his regular job in 1992
and received unemployment compensation for some portion of the 2-
year period under consideration.
Petitioner's factual testimony was relatively abbreviated
because of his intention to criticize the tax system procedure
rather than to show that respondent's determination was in error.
Within petitioner's abbreviated presentation, however, were
sufficient facts to demonstrate some flaws in respondent's
reconstruction. In particular, petitioner's costs of living for
his age and locality were less than the average used by
respondent. Accordingly, we hold that petitioner's taxable
income, as redetermined, should be reduced from $32,192 for 1993
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