Edward J. Frami - Page 9

                                        - 9 -                                         

               We turn now to respondent's reconstruction of petitioner's             
          income by use of BLS statistics.  Where a taxpayer has not filed            
          a tax return, respondent may reconstruct the taxpayer's                     
          unreported income.  Holland v. United States, 348 U.S. 121                  
          (1954).  The reconstruction of income need only be reasonable in            
          light of all surrounding facts and circumstances.  Giddio v.                
          Commissioner, 54 T.C. 1530, 1533 (1970).                                    
               Petitioner invoked the jurisdiction of this Court but at               
          trial did not produce evidence to rebut the fact that he had                
          sources of income during 1993 and 1994.  Petitioner possessed               
          records that he believed would show that he was not obligated for           
          tax, but he declined and refused to show those records.  A                  
          blanket invocation of the Fifth Amendment privilege is simply not           
          a substitute for relevant evidence.  United States v. Rylander,             
          460 U.S. 752 (1983); Petzoldt v. Commissioner, 92 T.C. 661, 687-            
          688 (1989).  This Court has observed that                                   
               A valid assertion of the privilege against self-                       
               incrimination, however, is not a "substitute for                       
               evidence that would assist in meeting a burden of                      
               production," for to adopt such a view "would convert                   
               the privilege from the shield against compulsory self-                 
               incrimination which it was intended to be into a sword                 
               whereby a claimant asserting the privilege would be                    
               freed from adducing proof in support of a burden which                 
               would otherwise have been his."  * * *  [Petzoldt v.                   
               Commissioner, supra at 684-685 (quoting United States                  
               v. Rylander, supra at 758).]                                           
               The uncontroverted evidence produced by respondent and                 
          petitioner's testimony shows that petitioner did earn income                





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011