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explained the $180,000 as a rough estimate. At trial, he
testified that the correct January 1, 1994, amount was roughly
$60,000 to $70,000. He did not explain in his testimony why his
rough estimates at trial differed from his rough estimate to
Klimkiewicz by about $110,000 to $120,000. Nor did petitioners
clarify this substantial difference on brief. (3) On numerous
occasions Michael borrowed--sometimes from family and sometimes
from business lenders--amounts for short terms and for long
terms. In the case of borrowings from business lenders Michael
incurred substantial interest expenses. Michael incurred these
expenses without seeking to earn income on what he contended were
large amounts in his cash hoard. Because he neither earned on
his claimed cash hoard nor used his cash hoard to reduce
borrowings when opportunities were presented, it is evident that
Michael’s actions were not significantly affected by any
evaluation of opportunity cost.
(iii) Analysis
In DeVenney v. Commissioner, 85 T.C. 927, 933 (1985), we
stated that--
we cannot fail to note that the existence of a cash
hoard is endlessly claimed by taxpayers to explain the
existence of otherwise unexplained sources of funds.
It is rare indeed that a taxpayer successfully proves
this contention.
In DeVenney, the taxpayers’ evidence prevailed completely; not
only did it overcome the Commissioner’s fraud contentions, but it
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