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bank deposits and cash expenditure method to reconstruct
petitioner's income and to determine that petitioner had
unreported income for the 1993 taxable year.9 The reconstruction
is especially reliable in the present case because petitioner
either stipulated or verified through her testimony the amount of
deposits made to her bank accounts and the amount of cash that
she expended during the 1993 calendar year.
Generally, respondent's determination in a statutory notice
of deficiency is entitled to a presumption of correctness. Welch
v. Helvering, 290 U.S. 111, 115 (1933). The fact that
respondent's revised reconstruction reduces the amount of
petitioner's unreported income does not affect the presumption of
correctness attached to respondent's original determination of
petitioner's tax deficiency, to the extent not reduced by
respondent's revision. Gobins v. Commissioner, 18 T.C. 1159,
1168-1169 (1952), affd. per curiam 217 F.2d 952 (9th Cir. 1954).
Petitioner does not argue that respondent's determination is
not entitled to a presumption of correctness.10 Instead,
8(...continued)
all such expenses, except depreciation, as cash expenditures for
purposes of reconstructing petitioner's income.
9 Respondent's reconstruction of income is a revised version
of the Tax Auditor's reconstruction that was attached to the
statutory notice of deficiency. Respondent's revised
reconstruction determines petitioner to have less unreported
income than the original reconstruction. See supra pp. 8-9.
10 In cases of unreported income, the Court of Appeals for
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