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period applied because the taxpayer reported gross income of
$66,022 and failed to report $408,318. In Arendt, we held that
the notice of deficiency was arbitrary because the Commissioner
failed to produce substantive evidence linking the taxpayer to
the tax-generating act of receiving income from the sale of
illegal drugs. Here, petitioner admitted that he received the
bank draft for �570,000. Cf. Tokarski v. Commissioner, 87 T.C.
74 (1986).
Petitioner contends that it is improper for respondent to
determine a deficiency merely because the time to assess tax was
about to expire. We disagree. If the notice of deficiency is
otherwise valid, it is not invalidated merely because the time to
assess tax has almost passed.
4. Petitioner's Documentary Evidence
Petitioner received a letter dated February 17, 1994, from
Banks & Co., Chartered Accountants. The letter states that the
Board of A.T.O. did not want Jack Petchey and his companies to
know what happened to the �570,000, so they placed those funds
out of his control until they could reach a settlement with him.
Petitioner contends that this letter supports his position that
respondent's notice of deficiency is invalid because it shows
that he did not personally benefit from the settlement funds. We
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