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reconstruct petitioner’s income for those years. See Giddio v.
Commissioner, 54 T.C. 1530 (1970).
According to respondent, the increase in petitioner’s net
worth from year to year is attributable to unreported income
received by petitioner during those years. Respondent contends
that one likely source of omitted income is Grand Video.
Petitioner contends that respondent’s net worth analysis is
flawed because it fails to take into account petitioner’s cash
hoard. According to petitioner, respondent’s failure to account
for his cash hoard results in an overstatement of the increase in
his net worth for each year in issue, which in turn results in an
overstatement of his income for those years. Otherwise,
petitioner agrees with the items included in respondent’s net
worth analysis for each year.
At trial, petitioner estimated that as of the beginning of
1993 he had approximately $150,000 in cash in his safe at home.
He claims that he saved between 80 and 90 percent of his earnings
over the years and that those savings were reduced to cash and
placed into his safe. He further claims that he profited from
various real estate transactions and other investments over the
years, and that those profits were likewise converted to cash and
placed into his safe. This claim, however, is contradicted by
other evidence in the record. For example, petitioner claims
that the partnership he established in 1979 was profitable, but
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