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worth computations. Petitioners do not otherwise contest
respondent's deficiency determinations or the additions to tax
pursuant to section 6661. We conclude that petitioners have
conceded the uncontested items. Money v. Commissioner, 89 T.C.
46, 48 (1987).
Net Worth Analysis
Respondent used the net worth plus expenditures method to
determine that petitioners had unreported income in 1984, 1985,
and 1986. In a case such as this, where the determination of
unreported income as well as the existence of fraud depends upon
respondent's net worth computations, we must examine the validity
of respondent's computations in light of the standards set forth
in Holland v. United States, 348 U.S. 121 (1954), and United
States v. Massei, 355 U.S. 595 (1958). Under those standards,
the Commissioner must establish, with reasonable certainty, an
opening net worth as a starting point from which to calculate
future increases in the taxpayer's assets. Holland v. United
States, supra at 132. In addition to showing an opening net
worth, the Commissioner must also show a likely source of the
unreported income or negate possible sources of nontaxable
income. Id. at 132-138; United States v. Koskerides, 877 F.2d
1129, 1137 (2d Cir. 1989); Smith v. Commissioner, 91 T.C. 1049,
1059 (1988), affd. 926 F.2d 1470 (6th Cir. 1991).
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