- 9 -
We are also troubled by assumptions the revenue agent made
on account of a lack of records from the joint account. The
check register that the revenue agent used covered only 9 months
of 1992. She averaged the monthly expenditures made during those
9 months and applied that amount to the 3 remaining months not
covered by the check register. She then applied the average
monthly expenditures for 1992 to 1993 and 1994. We consider this
inappropriate and unreasonable given that petitioners’ joint
checking account records could have been obtained from
petitioners’ bank.
On the other hand, we reject petitioner’s implausible claim
that the source of many of the expenditures included in the
revenue agent’s analysis was a cash hoard that he kept in a safe
in his residence. See De Venney v. Commissioner, 85 T.C. 927,
933 (1985) (“[T]he 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.”). After careful consideration of the
record, we accept respondent’s analysis subject to the following
adjustments. For 1992, the following expenditures must be
eliminated from respondent’s cash T-account computation: (1)
Itemized deductions; (2) personal expenditures estimated through
the use of monthly averages; and (3) the $26,600 expenditure for
new roofs. For 1993 and 1994, personal expenditures determined
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011