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cases. See Hoffman v. Commissioner, 298 F.2d 784, 786 (3d Cir.
1962), affg. in part on this issue T.C. Memo. 1960-160.
Where the Commissioner has determined a deficiency by using
the net worth method, we may adjust a determination of opening
net worth shown by the trial record to be unrealistic. Hoffman
v. Commissioner, supra; Baumgardner v. Commissioner, 251 F.2d
311 (9th Cir. 1957), affg. T.C. Memo. 1956-112; Potson v.
Commissioner, 22 T.C. 912, 928-929 (1954), affd. sub nom.
Bodoglau v. Commissioner, 230 F.2d 336 (7th Cir. 1956). Errors
in the net worth method do not invalidate the presumption of
correctness attaching to other aspects of the Commissioner’s
deficiency determination if the determination was not arbitrary.
Hoffman v. Commissioner, supra at 788.
We may apply the Cohan rule (enunciated in Cohan v.
Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930)), if
appropriate, to decide the amount of cash on hand at the
beginning of the period to which the net worth method is applied.
Bodoglau v. Commissioner, 230 F.2d 336, 340-341 (7th Cir. 1956),
affg. Potson v. Commissioner, 22 T.C. 912 (1954).
The Court of Appeals stated, "based on our viewing of the
deposition, we find Jeanette's testimony as to the $380,000 cash
hoard quite straightforward, and it seems to be credible."
Estate of Spear v. Commissioner, 41 F.3d at 114. In response to
that finding, we have carefully reviewed petitioner's videotaped
deposition testimony and the entire record to enable us to
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