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of those reductions of petitioners' bank deposits for the years
at issue.5 However, petitioners contend that for each year at
issue the excess of (1) petitioners' bank deposits reduced by
those amounts attributable to nontaxable sources that respondent
allowed over (2) the amount of total income that petitioners
reported in their return for each such year also is attributable
to a nontaxable source, namely, a cash hoard.
Respondent may disprove petitioners' allegation of a cash
hoard by showing that respondent's reconstruction of income under
the bank deposits method is accurate and that petitioners'
allegation of a cash hoard is inconsistent, implausible, and not
supported by objective evidence in the record. See Parks v.
Commissioner, supra. On the record before us, we find that
respondent's reconstruction of petitioners' income under the bank
deposits method, as alleged as part of respondent's alternative
position in the answer, is accurate. Indeed, the only complaint
4 (...continued)
on the notice, respondent reduced petitioners' total deposits for
the years at issue in amounts of such deposits that were greater
than those allowed under respondent's alternative position in the
answer.
5 Respondent also adjusted the total income of Paul & Joe,
Inc., (1) for 1993 in the amounts of $14,515 for corporate
purchases paid for by Mr. Mifsud and $2,000 for checks deposited
to that business for cash and (2) for 1994 in the amounts of
$11,946 for corporate purchases paid for by Mr. Mifsud and $7,691
for checks deposited to that business for cash. Petitioners do
not dispute those adjustments.
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