Darrell L. Gaines - Page 15

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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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