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reported that the condition of Mr. Judy’s health precluded a
deposition. Petitioner’s report was accompanied by a one-
sentence note written on a doctor’s prescription pad and signed
by J. Richard Allison III, M.D., which read: “Pt. [patient]
should be up on feet for short distance and short period of time
only.” In early February we discussed this matter with the
parties in a telephone conference call. When we suggested a
bedside deposition of Mr. Judy as an accommodation, and asked
petitioner if he would be willing to bear the additional
transportation costs that respondent would incur in coming to his
home, petitioner was noncommittal, stating that he could probably
make such arrangements but “it would take a while.” Mr. Judy was
not deposed. By Order dated March 29, 1996, the record was
closed.
OPINION
1. Unreported Income
Every taxpayer is required to maintain sufficient records to
enable the Commissioner to establish the amount of his taxable
income. Sec. 6001; sec. 1.6001-1(a) and (b), Income Tax Regs.
If such records are lacking, the Commissioner may reconstruct the
taxpayer’s income by any indirect method that is reasonable under
the circumstances. Cebollero v. Commissioner, 967 F.2d 986, 989
(4th Cir. 1992), affg. T.C. Memo. 1990-618; Petzoldt v.
Commissioner, 92 T.C. 661, 687 (1989); Schellenbarg v.
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