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determined deficiencies in the amounts of $18,232 and $13,074
relating to 1992 and 1994, respectively. See Perlmutter v.
Commissioner, 44 T.C. 382, 400 (1965)(holding that a valid notice
of deficiency indicates that the respondent has determined a
deficiency in tax in a definite amount for a particular taxable
year and intends to assess the tax in due course), affd. 373 F.2d
45 (10th Cir. 1967). A notice of deficiency is not invalid for
failure to explain the adjustments or to cite statutory
provisions on which respondent relied. See, e.g., Henry Randolph
Consulting v. Commissioner, 113 T.C. 250, 253 (1999); Campbell v.
Commissioner, 90 T.C. 110 (1988); Mayerson v. Commissioner, 47
T.C. 340, 348-349 (1966); St. Paul Bottling Co. v. Commissioner,
34 T.C. 1137 (1960). Accordingly, we reject petitioners’
contention.
II. Unreported Income
Petitioners contend that it was inappropriate for respondent
to use the “specific item” method to determine petitioners’
deficiencies. The “specific item” method is an indirect method
of income reconstruction, which consists of evidence of specific
amounts of income received by a taxpayer and not reported on the
taxpayer’s return. Estate of Beck v. Commissioner, 56 T.C. 297,
361 (1971). It is well settled that taxpayers are required to
report every item of income received and maintain records to
establish the correct amount of income, deductions, and credits
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