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personal expenses incurred by TFC on behalf of petitioner were income to
petitioner.
Issue 2. Unreported Income--1988
Respondent argues that petitioner failed to include as income all of the
deposits to his personal account for the 1988 tax year.
Generally, the Commissioner may use a method of reconstruction that
clearly reflects income. Sec. 446(b); Holland v. United States, 348 U.S. 121
(1954). And the reconstruction of income need only be reasonable in light of
all surrounding facts and circumstances. Giddio v. Commissioner, 54 T.C. 1530
(1970). If the taxpayer believes the Commissioner's method of computation is
unfair or inaccurate, the burden is on the taxpayer to show such unfairness or
inaccuracy. DiLeo v. Commissioner, 96 T.C. 858, 871 (1991), affd. 959 F.2d 16
(2d Cir. 1992).
The use of the bank deposits method for computing income has long been
sanctioned by this Court. Clayton v. Commissioner, 102 T.C. 632, 647 (1994);
DiLeo v. Commissioner, supra; Estate of Mason v. Commissioner, 64 T.C. 651
(1975), affd. 566 F.2d 2 (6th Cir. 1977). The taxpayer bears the burden of
proving that the Commissioner's determination of underreported income,
computed using the bank deposits method of reconstructing income, is
incorrect. DiLeo v. Commissioner, supra at 869; Parks v. Commissioner, 94
T.C. 654, 658 (1990).
Petitioner has made no arguments and has presented no evidence to
satisfy his burden of proving error in respondent's determination of
additional income from deposits to petitioner's personal bank account.
Accordingly, we sustain respondent's determination that the deposits made to
petitioner's personal bank account are income for the 1988 tax year.
Issue 3. Schedule C and Schedule E Income
Respondent has determined that petitioner's Schedule C expenses are
overstated; his Schedule E rental income is understated, and his Schedule E
rental expenses are understated. Respondent has made concessions as to each
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