- 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 1993Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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