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hold for safekeeping. According to Mr. Zaban, Mr. Neumyer gave him
the money because Mr. Neumyer was going to Las Vegas for several
weeks; and while there, Mr. Neumyer wanted Mr. Zaban to be in a
position to pay off Mr. Neumyer's obligations to certain
individuals in connection with Mr. Neumyer's bookmaking operations.
Mr. Zaban testified that after Mr. Neumyer's return from Las Vegas,
Mr. Neumyer never asked him to return the funds.5
Mr. Zaban's testimony was self-serving and lacked credibility.
The evidence reflects that on January 2, 1990, $40,000 in cash was
transferred from box 3567, a box controlled by Mr. Zaban to which
he had the key and which he was the only person ever to open, to
box 2164, a safe deposit box held in petitioners' names.
Petitioners offered no testimony and produced no evidence
indicating that the $40,000 deposited in box 2164 came from a
source other than box 3567. Petitioners failed to prove that Mr.
Zaban lacked discretion and control over entry to box 3567 and the
use of the cash in that box. See Pert v. Commissioner, T.C. Memo.
1997-150. Petitioners have failed to establish a nontaxable source
for the cash that existed in box 3567. We conclude that the
$115,100 is properly attributed to petitioners as cash on hand for
respondent's net worth calculation for 1989.
Petitioners' argument that respondent failed to meet each of
the elements of the net worth method, including the beginning cash
5 Mr. Neumyer died prior to the date of trial.
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