Ronald D. and Shirley A. Blush - Page 7




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          he began depositing his cash reserves when he started his                   
          business in 1991.                                                           
               Petitioner did not keep any records of how much cash he kept           
          at home or how much he had in his possession at any given time.             
          Petitioners could not adequately explain where the cash was kept.           
          Although petitioners testified that cash from real estate                   
          transactions and from worker's compensation settlements was                 
          withdrawn from the bank and kept at home, the testimony was not             
          specific as to the dates or amounts.  In addition, petitioner               
          testified that some portion of his business was conducted in cash           
          and that some household bills were paid in cash.  Again, the                
          testimony was vague.  The Court is not required to accept                   
          unsubstantiated testimony.  See Wood v. Commissioner, 338 F.2d              
          602, 605 (9th Cir. 1964), affg. 41 T.C. 593 (1964).  We hold that           
          petitioner's explanation of a cash hoard (nontaxable source) is             
          not credible.  We are further satisfied that respondent gave                
          petitioners proper credit for all nonincome sources of deposits.            
          We sustain respondent's determination, taking into consideration            
          respondent's concessions.                                                   
          2.   Section 6662(a)                                                        
               Respondent determined petitioners were liable for the                  
          accuracy-related penalty under section 6662(a) for both 1993 and            
          1994.  The accuracy-related penalty is equal to 20 percent of any           
          portion of an underpayment of tax required to be shown on the               






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