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petitioner's notes. The accountant had petitioner's bank
statements and canceled checks for 1991 and 1992, but he did not
bother to use them in preparing petitioner's returns for those
years.
Petitioner admits that his bookkeeping was "abhorrent". The
method petitioner used, however, was established by his
accountant and used by the accountant for many years. The
accountant used petitioner's main bank statements and canceled
checks to prepare petitioner's returns. Petitioner provided
those records to the IRS during the audit of his return.
Although the billing services provided petitioner with monthly
statements of his patients' receivables and collections,
petitioner did not keep those records. Respondent has not
proven, however, that petitioner destroyed or otherwise failed to
maintain those records in order to evade tax.
Petitioner purchased gold Krugerrands with substantial
amounts of cash during 1991. The IRS agent testified that he
assumed the cash came from petitioner's safe-deposit box.
Although the IRS agent never determined where the cash came from,
the notice of deficiency did not include an increase in
petitioner's 1991 income attributable to the cash payments for
the gold. There is no evidence that any of petitioner's patients
paid in cash. Petitioner's fees were collected by his billing
service, and payments were deposited into petitioner's checking
account.
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