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petitioner represented to the special agents that he was putting
away money “in anticipation of the Y2K problem”. Petitioner
stated that he had $300,000 in cash in petitioners’ personal safe
at home and another $200,000 in cash in safe-deposit boxes. Upon
review of the contents of the home safe, the special agents found
37 envelopes, each containing $5,000 in $100 bills, totaling
$185,000. When asked why he withdrew cash in $9,500 increments,
petitioner stated that he did it because that was the way his
father used to make cash withdrawals and that he understood that
a form must be filled out if cash transactions exceed $10,000.
At the initial interview with the special agents, petitioner did
not mention that he made regular cash payments to Phillips.
At petitioner’s second interview 2 days later, the special
agents’ review of the contents of petitioners’ safe-deposit boxes
revealed 60 envelopes, each containing $5,000 in cash, totaling
$300,000. When the special agents asked about the balance of the
cash that petitioners had withdrawn over the last 3 years, which
the special agents estimated at approximately $1.8 million,
petitioner said that “he spent it”. He did mention to the
special agents at that time that Phillips, his main contractor,
preferred to be paid in cash, and informed them that petitioner
issued Forms 1099 to Phillips each year, but Phillips did not
sign receipts for the cash payments he received from T.J.
Construction.
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Last modified: November 10, 2007