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petitioner kept in the first instance. For example, during the
year in issue, petitioner maintained a personal checking account
that she used to pay personal expenses. Yet, inexplicably, she
did not maintain a separate checking account for either of her
businesses, nor did she pay any business expense using her
personal checking account. Rather, she chose to deal principally
in cash, and occasionally in money orders.
We find this arrangement odd. Petitioner provided no
persuasive explanation at trial why she would pay her personal
expenses by check and her business expenses in cash, particularly
given the fact that her businesses generated gross income of
$92,092 and that she claimed business expenses of $74,179.
Surely she must have known that paying in cash does not leave the
paper trail that is essential to proving entitlement to
deductions claimed on a return. Also, making large purchases in
cash, e.g., a $5,500 mower, or even buying money orders, must
have been inconvenient, as well as unsafe. Quite frankly, we
regard this proclivity to using cash (or cash substitutes) as
fostering testimony that is self-serving. See Niedringhaus v.
Commissioner, 99 T.C. 202, 212 (1992); Tokarski v. Commissioner,
87 T.C. 74, 77 (1986). This proclivity also reflects poorly on
petitioner’s credibility. See Diaz v. Commissioner, 58 T.C. 560,
564 (1972); Kropp v. Commissioner, T.C. Memo. 2000-148.
Also noteworthy is the fact that petitioner failed to call
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