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Commissioner, 64 T.C. 651, 656-657 (1975), affd. 566 F.2d 2 (6th
Cir. 1977). Bank deposits are prima facie evidence of income.
Estate of Hague v. Commissioner, 132 F.2d 775 (2d Cir. 1943),
affg. a Memorandum Opinion of this Court. The bank deposits
method assumes that all money deposited in a taxpayer's bank
account during a given period constitutes taxable income, unless
shown to derive from a nontaxable source. Price v. United
States, 335 F.2d 671, 677 (5th Cir. 1964).
Although requested, petitioner did not supply respondent
with books and records showing sources of income. Petitioner
told the agent that he and his wife had no bank accounts.
Respondent's agent identified their bank accounts through third
party information provided from summonses issued to banks in
northern New Castle County, Delaware. Although the bank accounts
included in respondent's analysis were not in petitioners' names,
there was ample evidence to attribute them to petitioners.
All three bank accounts examined were opened by petitioner.
He made the deposits in the accounts. On the IHRL and R.E.P.,
Ltd. accounts petitioner had sole check signing authority; on the
Ferry Associates account this authority was shared with Mrs.
Ferry and allegedly with petitioner's parents, although there is
no evidence they used the account. Petitioners' home address was
listed on the accounts, and monthly bank statements were sent
there.
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