- 7 -
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withdrawn from the bank and kept at home, the testimony was not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
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011