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3. Conclusion
During 1989, petitioner received $934,183 and disbursed
$1,245,625 that did not relate to his investor-funded projects.
Most of the difference is accounted for by the $200,000 of
investors' funds that he used for personal purposes. Petitioner
has not shown that he had authority to use the investors' funds
for his personal investments or that he received loans that he
used for personal purposes. See Commissioner v. Glenshaw Glass
Co., 348 U.S. 426, 431 (1955) (taxpayer is taxable on accessions
to wealth over which he or she has complete dominion).
Petitioner had income in 1989 to the extent that he did not have
an additional nontaxable source of funds for that year or that he
used investors' funds for personal purposes without authority.
Thus, we conclude that petitioner underreported his taxable
income by $218,542.
B. Whether Petitioner is Liable for the Addition to Tax Under
Section 6651(a)(1) for Failure To File Timely
Section 6651(a)(1) imposes an addition to tax of up to 25
percent for failure to file timely Federal income tax returns
unless the taxpayer shows that such failure was due to reasonable
cause and not willful neglect. United States v. Boyle, 469 U.S.
241, 245 (1985). To prove "reasonable cause", a taxpayer must
show that he exercised ordinary business care and prudence and
was nevertheless unable to file the return within the prescribed
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