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records sufficient to establish the amount of such taxpayer's
income. Sec. 6001; DiLeo v. Commissioner, 96 T.C. 858, 867
(1991), affd. 959 F.2d 16 (2d Cir. 1992). Where a taxpayer fails
to maintain adequate books or records, the Commissioner may
determine the taxpayer's income by, among other methods, the bank
deposits method. Mallette Bros. Construction Co. v. United
States, 695 F.2d 145 (5th Cir. 1983); DiLeo v. Commissioner,
supra. Bank deposits are prima facie evidence of income. Mills
v. Commissioner, 399 F.2d 744, 749 (4th Cir. 1968), affg. T.C.
Memo. 1967-67; Clayton v. Commissioner, 102 T.C. 632, 645 (1994);
DiLeo v. Commissioner, supra at 868. The taxpayer has the burden
of proving that the Commissioner's determination is incorrect.
Rule 142(a); Mills v. Commissioner, supra at 749; Clayton v.
Commissioner, supra at 645.
The corporate petitioner argues that its unexplained bank
deposits consist entirely of funds advanced by Mr. Sutton to
provide the corporate petitioner with sufficient working capital.
The corporate petitioner includes in these funds cash loans Mr.
Sutton allegedly received from Mr. Palmer. The Court is not
persuaded that Mr. Palmer made any loans to Mr. Sutton, let alone
that such "loans" account for the corporate petitioner's
unexplained bank deposits. The corporate petitioner asserts that
the proceeds of all of Mr. Sutton's personal checks to the
corporate petitioner that were cashed eventually ended up as
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