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within 3 years after the tax returns for 1982, 1983, and 1984
were filed. The notice of deficiency is timely and assessment
of deficiencies for these years is not barred by the statute of
limitations.
We hold for respondent on this issue.
II. Income
Under section 61(a)8 petitioner is required to include in
gross income for 1982 through 1986 the business income, interest,
and royalties he received in these years. Also--
Section 6001 requires all taxpayers to maintain
sufficient records to determine their correct tax
liabilities. Where a taxpayer fails to keep the required
books and records, or if the records he or she maintains do
not clearly reflect income, then respondent is authorized by
section 446 to reconstruct income in accordance with a
method which clearly reflects the full amount of income
received. The reconstruction need only be reasonable in
light of all surrounding facts and circumstances.
[Citations omitted.]
Petzoldt v. Commissioner, 92 T.C. 661, 686-687 (1989), and cases
8Sec. 61(a) provides, in pertinent part, as follows:
SEC. 61. GROSS INCOME DEFINED.
(a) General Definition.--Except as otherwise provided
in this subtitle (subtitle A, income taxes], gross income
means all income from whatever source derived, including
(but not limited to) the following items:
* * * * * * *
(2) Gross income derived from business;
* * * * * * *
(4) Interest;
* * * * * * *
(6) Royalties;
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