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the safe, and that the money in the safe came from savings from
his years of working for IBM and inheritances from his father.
On March 29, 1994, petitioner-husband gave Davis a revised
estimate of the amount of his cash which included the proceeds
from the sale of petitioners' assets in Brazil.
Davis did a bank deposits analysis to estimate petitioners'
income for 1990 and 1991. She examined petitioners' bank
accounts. She sought to exclude from her analysis sources of
income which she thought were nontaxable, including transfers
between accounts, expense reimbursements, and offsetting wire
transfers. She apparently did not believe that petitioners had a
significant amount of money in Brazil as of December 31, 1989.
Petitioners deposited $136,408 in nine bank accounts in
1990. They reported that they had received $23,574 of that
amount as Schedule C gross receipts on their 1990 return.
Respondent subtracted $23,574 and gross receipts of $4,900
allocated to petitioner-wife, and determined that petitioners had
understated their taxable income for 1990 by $107,934.
Petitioners deposited $396,905 in eight bank accounts in
1991, $147,426 of which they reported on their 1991 return as
Schedule C gross receipts. Respondent determined that
petitioners had understated their taxable income for 1991 by
$249,479 ($396,905 - $147,426).
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